Bradley attorney Alex Purvis was quoted in Healthcare Risk Management on the expansion of the cyberinsurance market, which means that healthcare organizations can get more coverage for a lower premium than in the past.
Purvis explained that insurers also are building experience in paying claims, which helps them write policies that are realistic in terms of what they cover and what is excluded. Insurers focusing on cyberinsurance will have the best grasp and be able to pay legitimate claims, he said.
“The insurance policies that are cyberspecific tend to respond to the claims. The cyberinsurance industry tends to be a little more claim-friendly than you might see in some other insurance arenas,” Purvis said. “That’s another advantage to the market being so competitive now. These insurers don’t want to get the reputation that they accept your premium dollars, but when you submit a claim they refuse to pay it based on some tiny language on page 12 of their insurance policy.”
Some commercial general liability (CGL) insurance policies will cover the losses associated with a data breach, but that is becoming less common now that insurers recognize the size of that risk and prefer covering it with specific cyberinsurance policies, Purvis said. More CGL policies now specifically exclude the cyberrisk, making it more important to purchase a cyberpolicy, he added.
Purvis also cautions risk managers about the importance of putting the insurer on notice once a data breach or other covered cyberincident is discovered.
“What keeps me up at night as a policyholder lawyer is the fear that I’ve got a bunch of clients who are facing a claim but have not put their carriers on notice,” Purvis explained. “They may have a great insurance product, but if they don’t put them on notice they may lose the opportunity get the coverage they’ve already paid for.”
The complete article, “Expanding Cyberinsurance Market Brings Benefits to Healthcare,” appeared in Healthcare Risk Management on December 1, 2018.