akshit kIn the digital age, the threat of cyberattacks is always present. The dental service organisations (DSOs) and large group practices do not realise the importance of and need for a systematic cyber insurance policy.
It is not only the financial aspect that you need to consider when protecting your EBITDA (earnings before interest, taxes, depreciation, and amortisation).
It is also about your company’s security. That is why the most crucial thing is to obtain extensive cyber insurance now. The serious impact a cyber attack could have on your future, and the efforts you have put in, are portrayed here.
In this blog we discuss the importance of Cyber Insurance and Non-negotiable components in your insurance policy
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Mitigata: Your Trusted Partner for Cyber Insurance
Selecting the ideal partner for cyber insurance is as crucial as the policy itself. More than 800 organisations place their trust in Mitigata, not only for coverage but for active defence against cyber threats.
We take pride in our 100% client retention rate, a unique accomplishment in an industry where reliability and trust are paramount.
What Makes Over 800 Companies Choose Mitigata?
We are the sole cyber insurance provider in the market that grants exclusive access to our proprietary security tool, Mitigate Console, ensuring full visibility into your organisation’s cyber risks. We assist you in:
- Identifying weaknesses in systems and networks before attackers can exploit them.
- Training staff with simulated phishing and credential theft scenarios.
- Scanning the dark web for compromised credentials or sensitive data.
- Monitoring fraudulent domains, phishing websites, and hidden threats in real-time.
- Receive 24/7 support from India’s most attentive cyber resilience professionals.
- Comprehensive cyber protection available in a single package: Insurance. Compliance. Security.
- Mitigata offers competitive market rates while maintaining high standards in technology, monitoring, and results.
The Destruction Caused by a Cyber Attack: An Actual Scenario
Let us look at the case of a DSO with an annual turnover of $25 million and maintaining around 10,000 patient records across various locations.
The business is doing great, the patients are satisfied, and everything is just perfect. But then an unfortunate thing happens: ransomware completely attacks the system, bringing the operation down for three weeks. The whole system is paralysed, and chaos reigns.
The First casualty of the whole horror movie is the Lost Revenue:
This DSO generates $25 million in annual revenue, with weekly earnings of about $480,769.
The three-week period without sales due to a cybersecurity-related shutdown would result in a loss of revenue exceeding $1 million, the exact amount that will not be recovered.
This is an instant hit to your EBITDA that could take years to recover from, if at all.
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The Second casualty is the Breach Notification Costs:
Under HIPAA regulations, a provider has to notify each person whose data has been breached. With 10,000 records of patients and an average breach notification cost of $250 per patient mistakenly notified.
The total cost to meet the regulatory requirements will be quite high, up to $2.5 million. It is unavoidable, it is a legal requirement, and the company will be left in a very difficult situation.
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Reputation Repair:
Along with financial losses, the reputation damage becomes unbearable. The patients’ hope is lost, and the competitors start preparing for the offensive, while the brand is already in decline.
The costs of public relations, communication with the patients, and possibly legal defences could add another few hundred thousand dollars to your bill; moreover, this is just the beginning of the rebuilding process of your public image.
Cybersecurity Forensics and Legal Fees:
It is necessary to hire cybersecurity professionals to investigate the breach (which is required under HIPAA) and prevent it from happening again.
An attorney will also be needed to guide you through the regulatory maze, monitoring any lawsuits that may come your way, and achieving compliance.
The price tag for these critical services might range from $500,000 to $1,000,000, depending on the attack’s complexity.
The overall impact of this cyber attack on your DSO might exceed $5 million or account for over 20% of your annual income.
This scenario is not merely a harsh quarter; it is a financial disaster that could threaten the very existence of your business. Even worse, if you lack comprehensive cyber insurance, you will bear the full loss.
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The Non-Negotiable Coverage Components in Your Cyber Insurance Policy
Inadequate cyber insurance stemming from a risk of catastrophic loss amounts to financial self-sabotage.
Continuous protection of your EBITDA and the existence of your company will demand a full alignment with the following:
Business Interruption Coverage:
This one’s indispensable. If a cyberattack forces the shutdown of your facility, your business requires coverage for the income that has been lost during that period.
As it has been shown, a three-week shutdown could result in a loss of nearly $1.5 million. Your emergency funds should be able to support at least one month of sales, and there should be a financial protection plan against ruin.
Data Breach Response and Notification Costs:
HIPAA requires that in case of a data breach, all affected patients are to be notified, and that is not a cheap process.
In the case of 10,000 patient records, it can cost you $2.5 million just to comply with the law. Your policy should cover these costs entirely, or you are putting your business at very high risk.
Cyber Extortion and Ransomware Coverage:
The attacks with ransomware are becoming more common, and they are also costlier.
Your policy must cover the ransom payment (only if absolutely necessary) plus a data recovery and systems restoration of your compromised areas.
If not, you will have no option but to pay out of pocket or even suffer irretrievable permanent data loss.
Legal and Regulatory Coverage:
Data breaches lead to extensive legal and regulatory liabilities, including fines, penalties, and civil actions. Your liability insurance will reimburse you for legal fees and fines related to data breach incidents. This is very important to maintain your financial health.
Crisis Management and Reputation Repair:
A data breach could ruin your reputation in an instant. Your plan will have to cover crisis management, public relations, and patient communication activities that will enable you to gain trust back and to rebrand.
Cybersecurity Forensics:
After a breach, you have to create and comprehend what transpired and how to prevent it in the future. This is the HIPAA requirement. This billing brings in the examination and assessment of the breach by the IT experts, and also for future security enhancements.
Third-Party Liability Coverage:
Every patient who is informed of a data breach is now at risk of being sued. Identifying violations of patient health information not only exposes you to regulatory fines but also poses a risk to patients.
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It’s a certainty that the 10,000 patients from all those companies combined could sue your company and bring about a wave of lawsuits and settlements.
Third-party liability will cover defence costs and possible litigation expenses (including settlements or judgments). The absence of this would mean that the large number of lawsuits could have a very negative impact on your business, and the effects could be felt throughout.
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Conclusion
Training in cybersecurity and the HIPAA regulations is indispensable, but it is not an absolute defence.
No matter how much training is provided and how secure the system is, there is always the possibility of a single careless action or a bad click that would put the entire system at risk.
In fact, cybercriminals are continually developing new techniques to penetrate systems and exploit their weaknesses.
This is why comprehensive cyber insurance is needed. Your safety net is the only thing that separates you from financial disaster if the preventive measures fail. Given today’s digital world, it is not only unwise but also foolish to be without comprehensive cyber insurance.
Secure your EBITDA. Secure your future. Choose Mitigata today.
