While cyber exposures in the hospital space are generally always an area of concern for insurers and risk managers, the invasion of Ukraine by Russia has led to concern among cyber security experts that the healthcare sector could be at expanded risk due to the conflict.
The American Hospital Association bolstered these concerns recently, following the declaration of “Shields Up” warning from the Cybersecurity and Infrastructure Security Agency, noting that the health care sector, among other segments in the United States, are at an increased risk for a cyber attack or incident from the Russian government.
Carriers can be expected to maintain a close eye on this segment as a result, as COVID-19 has already stretched beleaguered hospital systems thin. This has created a new level of potential exposures and risks in the cyber segment, inflamed by increased threat activity from bad actors, overworked or under-staffed facilities and the general influx of patients and the exposures that come along with it.
Expect continued tweaks to cyber programs, potentially in the form of exclusions alongside possible rate increases as carriers look to adjust to growing claims severity and frequency within this segment. Watch for a slow drip of deductibles being introduced to coverages, as carriers aim to offset the costs of claims without jumping to hard rate increases for the time being.
Texas Hospital Insurance Exchange has filed to add a deductible to its cyber liability endorsement under its Medical Professional Liability product for hospitals. The carrier is aiming to bring this change to its product in Texas, pending approval from state regulators, and will automatically this deductible to its hospital professional liability policies at the request of its Reinsurance partner, Tokio Marine Houston Casualty Company (TMHCC). This $2,500 deductible will apply to each claim, and will not erode the product’s limit of $100,000. This will apply to all coverages under the policy, including multimedia liability, security and privacy liability, cyber extortion, cyber terrorism and network asset protection, among others.
MedMal Direct Insurance Company will see a number of changes to its Cyber Protection endorsement under its MDIC Healthcare Professional Liability policy, primarily in the form of clerical and editorial changes, though the carrier will also add a provision for a deductible to the policy. These changes are expected to go into effect on April 1 in North Carolina. Limits for this endorsement start at $50,000 for each claim. The program includes an Insured Organization Annual Aggregate Limit, which starts at $50,000 for one physician insured within the organization, up to $250,000 for 21 or more physicians. The deductible will clock in at $5,000 separately for each claim under the policy.
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