Cyber Insurance Offerings Growing In Response To New Threats

Cyber Insurance Offerings Growing In Response To New Threats

July 28, 2017, Medtech Insight

Marialuisa Gallozzi, John Buchanan, and Jeff Kiburtz are quoted in a Medtech Insight article regarding the growing interest in the healthcare sector in buying cyber insurance. According to Gallozzi, "We are in the midst of an evolution of the insurance market right now in this area." She says cyber insurance policies have been a growing trend but unlike other more traditional policies the market is right now "betwixt and between" in terms of developing specific cyber insurance standards. Gallozzi adds that the industry is "migrating from those traditional policies and moving into cyber insurance policies that pick up different aspects of the risk but may otherwise have fallen in those traditional insurance policies."

"It's still really the wild west out there," says Buchanan. "Some of the forms are pretty well drafted, while others are very ineptly drafted, and the scope of coverage really varies from form to form. [It requires] very careful attention." Buchanan adds that with the recent rise of ransomware attacks in the health-care space, it is worth remembering that, while some insurers may cover damages from ransomware hacks, many firms have sublimited their cyber-extortion policies, just as the threat has increased. 

"As technology changes, and we're seeing it particularly with companies moving into the digital health space, where you have things that sort of feel like products but at the same time they feel like professional services and the distinction between traditional products risks and professional services risks," says Kiburtz. "There's typically an exclusion for professional services under many products liability or general liability policies. How well the pieces fit together is not necessarily intuitive and I don't think people should assume all their insurances are going to provide the different coverages, that they're going to be gap free when they're moving across programs, particularly in the context of these newer risks."