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coverage required varies based on the job. A doctor will obviously require a very different professional liability policy from the operator of an ambulance or the administrator of a health system,” he says. “The rise in data theft has forced doctors to consider a cyber-liability policy, even if they are the only physician in a small practice. Similarly, emerging industries within healthcare create new exposures simply because they are a new business segment.” Friedman agrees that cyber-insurance is a major emerging need in coverage. “With medical records increasingly going electronic, and more doctors and facilities allowing patients to access test results and other medical records online, the opportunity for hacking has gone up enormously, and physicians and facilities alike face growing liabilities for the protection of data and personally identifiable information,” he says. According to the National Association of Insurance Commissioners and The Center for Insurance Policy and Research, demand for cyberliability insurance jumped 21 percent between 2012 and 2013. The two wrote in a brief that increasingly frequent data breaches are putting additional pressure on businesses to protect the personal information that they possess. A typical cyber-liability policy may cover one or more of the following: • Liability for security or privacy breaches • The costs associated with restoring, updating or replacing electronic business assets • The costs associated with a privacy breach • Business interruption and extra expense related to a security or privacy breach • Expenses related to cyber-extortion or cyberterrorism • Liability associated with libel, slander, copyright infringement, product disparagement or reputational damage • Coverage for expenses related to regulatory compliance for billing errors, physical selfreferral proceedings, and Emergency Medical Treatment and Active Labor Act proceedings

DATA BREACHES IN THE HEALTHCARE INDUSTRY Total number of incidents reported:

199 2013

Total number of patient records impacted:

7.1 million Total number of incidents reported:

192 2012

Total number of patient records impacted:

2.98 million Total number of incidents reported:

149 2011

Total number of patient records impacted:

10.84 million Total number of incidents reported:

212 2010

Total number of patient records impacted:

5.43 million Source: Redspin, February 2014 report

Ultimately, Rosgen recommends that agents go in with a full suite of experience. It is that sophistication, he says, that will allow them to nail down a deal. “That’s how you work within the challenges,” he says. “Not everybody can be the specialist when it comes to risk management of an integrated healthcare delivery system because it’s a very complicated animal. Only a few of these agencies can really handle it.” SEPTEMBER/OCTOBER 2014 | 53  

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Profile for Key Media

Insurance Business America issue 2.04  

The magazine for America’s insurance broking and advice community.

Insurance Business America issue 2.04  

The magazine for America’s insurance broking and advice community.

Profile for keymedia