A single ransomware attack can tie up operations for days or weeks, while direct payouts typically exceed $1 million. Evaa Saiwal, Head-Cyber Insurance, PolicyBazaar for Business gives an insight on cyber insurance as a lifeline for patient trust in a data-driven era
The healthcare industry is living through a bit of a paradox. On one hand, digitisation has helped with meaningful advancement in patient care — think AI-driven diagnostics, telemedicine, and connected health records. On the other hand, the same digital dependence has opened the door to unprecedented waves of cyberattacks on healthcare providers.
According to the IBM Cost of a Data Breach Report 2023, the healthcare industry is the most expensive in terms of data breaches. The average cost is as high as $10.93 million per breach. This shows just how vulnerable a sector this can be inherent.
Behind the numbers lies an essential truth: a hospital doesn't just protect systems, but trust.
Every patient, while sharing intimate medical information, does so with an implicit belief that that information will be safe. When a cyber breach occurs, the loss is personal in nature and strips patients of their confidence in their caregivers.
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According to the IBM Cost of a Data Breach Report 2023, the healthcare industry is the most expensive industry in terms of data breaches. The average cost is as high as $10.93 million per breach.
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Healthcare: A sector under siege
Few industries are as vulnerable—or as valuable—to cybercriminals as healthcare. Medical records are prized on the dark web, fetching up to ten times the price of stolen credit card details. These records can be gold mines for fraud. A scamster can use these for anything from identity theft to false insurance claims.
Yet, the risk isn’t confined to data theft. Many hospitals still rely on ageing IT systems, patched together rather than overhauled, which are ill-equipped to withstand the sophistication of modern cyber threats. Even newer systems aren’t impervious, especially when human error—still the leading cause of breaches—is factored in.
Healthcare operational priorities add complexity. Providers cannot afford any downtime; life and death hang in the balance, dependent on access without interruption to systems. Naturally, cybersecurity often falls by the wayside in such an environment. But that is exactly what makes institutions all the more vulnerable.
In 2022, there was a ransomware attack on a US hospital network forced facilities to go dark, causing operations to be postponed and lifesaving care delayed for thousands of patients. Around the same time, a prominent medical institute in India faced a ransomware breach – it has opened that Pandora’s box on just how much can go wrong in these cases starting from service disruptions and going up to data recovery challenges.
Many hospitals still rely on ageing IT systems, patched together rather than overhauled, which are ill-equipped to withstand the sophistication of modern cyber threats.
The human cost of a data breach
For patients, a data breach is personal. They might not be aware of ransomware and phishing schemes' intricacies but know that something is wrong.
They understand one thing: privacy has been violated. According to one survey, 67 per cent of the patients will switch to another provider if their information is leaked. This is more than a statistic-it shows the fragility with which healthcare's trust has been shaken.
Fallout is not limited to public opinion. Regulators are now stepping in, issuing fines and tightening compliance requirements for healthcare organizations. Add to this the prospect of lawsuits and negative media coverage, and it is clear that the cost of a breach extends far beyond the balance sheet.
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According to one survey, 67 per cent of the patients will switch to another provider if their information is leaked. This is more than a statistic-it shows the fragility with which healthcare's trust has been shaken.
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Cyber insurance: The critical safety net
In this high-risk environment, cyber insurance has become more than just a financial tool; it is a strategic imperative. Most simply, cyber insurance creates a financial buffer against breach costs for legal defence, forensic investigation, and operational recovery-but its most valuable aspect lies in its prevention capabilities.
Policies aren't reactive anymore. Insurance companies are now providing their customers with risk assessments, system audits, and even employee training as part of the package. These all mitigate the root causes of breaches. Most breaches are the result of human error, which cyber insurance can avoid or prevent it from happening at all.
Most simply, cyber insurance creates a financial buffer against breach costs for legal defence, forensic investigation, and operational recovery-but its most valuable aspect lies in its prevention capabilities.
Difficulties with adoption
Despite its benefits, however, cyber insurance isn't an easy sell in healthcare. Premiums are steep, reflecting the industry's high-risk profile, and policies can be dense, with exclusions that require careful navigation. For some organizations, it seems prohibitively expensive—that is, until they calculate the alternative.
A single ransomware attack can tie up operations for days or weeks, while direct payouts typically exceed $1 million. Add to that regulatory fines and reputational damage, and the value of not having insurance makes the premium irrelevant.
To make the most of cyber insurance, healthcare leaders should view it as part of a broader strategy. One has to consider investing in modern IT systems, adopting zero-trust security frameworks, and having cybersecurity as a basic part of the organisation’s culture. Insurance is just one piece of the puzzle, and it cannot work in isolation.
A single ransomware attack can tie up operations for days or weeks, while direct payouts typically exceed $1 million. Add to that regulatory fines and reputational damage, and the value of not having insurance makes the premium irrelevant.
Rebuilding trust in a digital era
Cyber insurance is about signalling commitment. At a time when patient interactions increasingly happen in digital space, a patient's trust in his or her provider's ability to protect data is just as important as the trust he or she places in that provider's medical acumen.
Investing in cyber insurance for healthcare organizations says much: we take your data, your privacy, and your trust seriously. It's a step toward rebuilding confidence, not just in the wake of a breach but as a foundational principle of care.
The challenges are huge, yet they pale in comparison to the stakes. Integrating cyber insurance in a comprehensive cybersecurity strategy for healthcare providers, their system, reputation, and mostly the relationship they have with the patients will protect in building the digital fortress one needs to thrive in today's data-driven world.
