Cyber Liability Higher Limit Coverage: Why Do I Need It?

Cybercrimes specifically targeting the healthcare industry have significantly increased during the COVID 19 pandemic – so much so that the FBI recently issued warnings to the healthcare industry to be vigilant. Stolen patient records have a higher value than credit card information and ransomware demands are usually paid to get systems back online.

While the term “cyber liability” typically brings to mind security breaches and stolen sensitive information, cyber liability coverage is much broader addressing many exposures inherent in today’s virtual and computer-dependent world. As general liability policies add more cyber-related exclusions, cyber policies are stepping up to fill the void for exposures no longer covered under general liability policies.

Cyber liability expert Melvin Osswald discussed several unusual cyber liability scenarios in her recent LHA Trust Funds presentation “Cybersecurity in the Physician Office Practice” where cyber coverage responded:

Scenario 1:

A hacker breached the HVAC system at a medical office and installed a remote access program, which he used to turn off the building’s air conditioning on a hot summer day. An elderly patient waiting in the reception area became dizzy and fainted as a result of overheating. The patient was rushed to a hospital and was treated for a head injury. The patient’s family sued the medical office for the bodily injury she sustained as a result of the incident. Cyber Liability insurance covered the cost of the defense and the judgment.

Scenario 2:

Employees of a small medical clinic were provided with company-issued iPhones. With the use of malware, a malicious hacker gained unauthorized access to the medical clinic’s network and caused all of its company-issued iPhones to be corrupted and rendered useless. Cyber Liability Insurance covered the cost to replace the iPhones impacted by the malware infection.

Scenario 3:

The owner of a dermatology center pulled an image from a Google images web search and used it on the center’s website and online promotional material. The copyright holder of the image was able to locate the website and promotional material and sued for copyright infringement. The lawsuit demanded the removal of the image and compensatory damages. In an effort to resolve the matter, the owner of the dermatology center was required to attend mediation sessions over the course of several days. Cyber Liability insurance reimbursed the owner for her actual loss of earnings and reasonable costs and fees she incurred to attend the mediation sessions.

How Higher Limits Can Help

Purchasing cyber coverage with higher limits than provided under the LHA Trust Funds policies also provides for broader coverage. Policies with higher limits include additional coverage for:

• Bodily Injury liability for damages resulting from failing to prevent a security or privacy breach
• Physical damage to someone else’s property resulting from failing to prevent security or privacy breach
• Bricking Losses – Reimbursement for your equipment rendered useless because of a breach
• Reward Expenses
• Court Attendance Costs
• TCPA Defense for allegations of violations of the Telephone Consumer Protection Act, CAN-Spam Act, and similar regulations.

To learn more about these coverage components and others included in a cyber policy with higher limits, click here.

The Trust Funds provide basic limits of $100,000 of cyber coverage at no additional cost. However, our coverage does not include the broader components as outlined above. While $100,000 may well cover the cost of one ransomware attack, it will not be enough to compensate for lost revenue if you are unable to see patients, have damaged equipment, need system restorations, or if your patients sustain damage/harm as a result of a breach.

LHA Trust Funds has partnered with Tokio Marine to provide higher limits in excess of the limits we currently provide to help protect your bottom line. To discuss your cyber liability policy or obtain an estimate on the cost of higher limits, please contact Client Services Supervisor Lisa Pike at (225) 368-3827 or lisapike@lhatrustfunds.com.

Learn More

Confused about your cyber liability coverage? We explain basic cyber liability coverage components here.

Because cybersecurity risks are constantly evolving, we want our LHA Trust Funds members to be as knowledgeable and prepared as possible. Search our Cyber Liability & Risk Toolkit for the latest information regarding cyber liability risks.