In the current digital era, the risk of cyberattacks is ever-present. For dental service organizations (DSOs) and large group practices, the lack of understanding of the importance and requirement of systematic cyber insurance is comparable to running a marathon with injured legs, i.e., very costly and unimaginable in the long run.
Protecting your EBITDA (earnings before interest, taxes, depreciation, and amortization) is more than just about profit improvement; it is about the safety of your business. That’s why the most important thing is to get comprehensive cyber insurance now, and the crippling effect even a cyberattack could have on your future and your hard work is described here.
The Devastation of a Cyberattack: A Real-World Scenario
Let’s examine a DSO generating $25 million in annual revenue and managing around 10,000 patient records across multiple locations. Business is roaring, patients are happy, and all is well with the world. However, misfortune strikes—ransomware completely cripples the system and paralyzes its operation for three weeks. The aftermath of this event has been devastating.
Lost Revenue:
With an annual income of $25 million, this DSO makes an average of $480,769 weekly. A three-week cyber attack-invoked temporary shutdown would result in a terrifying revenue loss of $1,442,307. That money will never be recovered—an instant hit to your EBITDA that could take years to recuperate from, if ever.
Breach Notification Costs:
A provider must inform every compromised individual of a data breach under HIPAA. With 10,000 patient records on file and an average breach notification cost of $250 per patient, you’re looking at $2.5 million just to meet regulatory requirements. It’s not an expendable cost—it’s a legal requirement and backbreaking without its own insurance.
Reputation Repair:
The damage doesn’t stop with financial losses. Your reputation takes a massive hit as well. Patients lose hope, rivals start to circle, and your brand drops. The costs of PR, patient communication, and possibly legal defenses could add another few hundred thousand dollars to your tab, and that’s just the start of rebuilding your public image.
Cybersecurity Forensics and Legal Fees:
You’ll want cybersecurity professionals to conduct the breach (required under HIPAA) and ensure it no longer occurs. You’ll also need an attorney to advise on the regulatory environment, police any suits that might come your way, and comply. These critical services may “cost” between $500,000 and $1,000,000, including the complexity of the attack.
This cyber attack might cost your DSO more than $5 million, or more than 20% of your annual revenue. This is not just a poor quarter—it’s a financial catastrophe that may jeopardize your business. And if you do not have full cyber insurance, you are responsible for 100% of the money lost.
The Non-Negotiable Coverage Components in Your Cyber Insurance Policy
Without adequate cyber insurance because of the risk of catastrophic loss, that is financial self-sabotage. To protect your EBITDA and your company’s survival, your plan will have to be reconciled with the following:
Business Interruption Coverage:
This is an absolute must. If operations at your facility are forced to cease due to a cyberattack, your business needs coverage for the revenue lost during that downtime. As we’ve seen, a three-week shutdown could cost nearly $1.5 million. Your reserves should cover at least one month of revenue, and there should be a policy to protect against financial ruin.
Data Breach Response and Notification Costs:
HIPAA mandates that you notify every affected patient in the event of a breach, and that is not cheap. With 10,000 patient records, you’re looking at $2.5 million to comply with the law. Your policy must cover these costs in full, or you’re putting your business at serious risk.
Cyber Extortion and Ransomware Coverage:
Ransomware attacks are becoming more frequent and costly. Your policy shall cover the expense of ransoming (only and if absolutely necessary) and restoring your compromised data and systems. Without that, you are stuck with no option but to pay for it out of pocket—or even suffer irretrievably permanent data loss.
Legal and Regulatory Coverage:
Breaches bring extensive legal and regulatory liability, including fines, penalties, and civil actions. Your liability policy will cover the costs of legal fees and fines incurred in the context of data breaches. This is essential to protect your financial health.
Crisis Management and Reputation Repair:
A data breach could destroy your reputation in a flash. Your plan will need to cover crisis management, public relations, and patient communication activities that will help you restore trust and repair your brand image.
Cybersecurity Forensics:
Following a breach situation, you must establish and understand what happened and how to stop it from happening again. This is required under HIPAA. This billing covers the investigation and assessment of the breach by cybersecurity professionals and for strengthening security in the future.
Third-Party Liability Coverage:
Each patient you inform of a breach is now in danger of being sued. As soon as you breach patient health information, you are not only dealing with regulatory penalties but also introducing the risk of patient lawsuits stemming from disclosing that patient data.
The 10,000 patients of all those companies could certainly file a suit against your company, “storming” the shores of lawsuits and settlements. Third-party liability covers the financial burden of defending against such litigation as well as the potential costs thereof (settlements or judgments). Without this, the combined impact of a portfolio of lawsuits could be disruptive and ripple throughout your business.
Don’t Be Fooled: Cybersecurity and HIPAA Training Are Vital, But Not Foolproof
Financing cybersecurity and HIPAA training is essential but not magic bullets. Despite all the training and the most secure software, there is always a single bad click, a careless action, and suddenly, your entire system is at risk. Cybercriminals constantly innovate, looking for new ways to compromise systems and exploit weaknesses.
Even with all the preparation you think you can have, there is always a chance that something will go wrong. That is why it is vital to have comprehensive cyber insurance. Your safety net is the only thing between you and financial ruin if the preventive measures fall short. In today’s digital world, it is not only unwise to be without comprehensive cyber insurance, but it is also foolhardy.
For DSOs and more prominent group practices, the financial consequence of a cyberattack may be catastrophic, obliterating years of profit and threatening the survival of your practice. Protecting your EBITDA isn’t just about making more money—it’s about ensuring your business can survive and thrive, even in the face of a significant cyber incident.
Cyberattacks are not a question of if but when. Without insurance coverage, you’re playing with fire, risking everything you’ve built for short-term savings. Please don’t wait until it’s too late. [It is important] to insure against all aspects of business interruption, breach notification, ransomware, legal costs, and loss of reputation. It’s the only way to protect your EBITDA and secure the future of your DSO in an increasingly dangerous digital world.
Mitigata – Smart Cyber Insurance for a Safer Future
Mitigating the devastating financial and reputational risks of cyberattacks requires more than just awareness—it demands action. Mitigata, a leader in smart cyber insurance solutions, is uniquely positioned to safeguard DSOs and large group practices against the unpredictable realities of today’s digital threats.
With comprehensive coverage tailored to the specific needs of dental service organizations, Mitigata offers policies that protect your EBITDA, reputation, and operational continuity. From business interruption and ransomware recovery to legal liabilities and reputation repair, Mitigata ensures you won’t face the storm alone.
Cyberattacks are inevitable, but their consequences don’t have to be. By partnering with Mitigata, you gain more than insurance—you gain peace of mind. Invest in your practice’s resilience and protect the legacy you’ve worked so hard to build. Don’t wait for a crisis to take action. Choose Mitigata and stay prepared for whatever the future holds.
Secure your EBITDA. Secure your future. Choose Mitigata today.
