In 2020, studies detected over 8,000 breaches containing over 12 billion records in the healthcare industry. The breached data included demographic information, dates of birth, medical history, clinical and treatment information and insurance data. Like healthcare organizations, senior living communities store pertinent health and personal data on their residents. Here are five reasons why senior living organizations need cyber insurance:
1. Privacy liability
Every day, your organization stores and transfers large amounts of electronic information. Resident records, test results, and vital internal information is stored on your systems. If you have a security breach and this information is exposed, the cost of a third-party lawsuit can be staggering. Cyber policies help limit the financial burden.
2. Notification costs
If you lose sensitive data, you have a legal duty to your residents. Your residents have a right to know if their personal information is available to the public. You may have only a few residents, or you may have thousands across several locations. Once the resident is notified there’s a higher chance of a suit. Notification costs are often covered by a cyber policy.
3. Business interruption
You have technology and systems needed to perform crucial day-to-day procedures, organizational tasks and serve your residents. When these systems are interrupted, and you can’t service your residents’ needs, there’s a massive probability of lost profit and/or potential danger to your residents. Most cyber policies help cover the loss of income and extra expenses that result from an interruption of your computer systems by a covered peril.
4. Reputational harm
A community’s failure to protect their resident’s confidential information can lead to the loss of current and potential residents and lower occupancy rates. Why would a new resident and their family come to your community if he or she knows their personal information isn’t safe? Some cyber policies will cover the cost for a marketing or public relations firm to help with crisis management.
5. Cyber crime
You may have already experienced phishing, telephone hacking, cyber threats, extortion, or an unauthorized electronic funds transfer. These attacks are happening daily, and senior living communities are a major target due to the abundance of health records.
Reach out to your PayneWest team to learn more about adding this important coverage to your portfolio.
This content is provided by Marsh & McLennan Agency for informational purposes only. Consult your actual insurance policy for details regarding terms, conditions, coverage, and exclusions.