Warranties and Insurance for Medical Data Protection: A Cause for Concern

Strategic Insights -

As more medical data move online, concerns about liability for innocent coding mistakes and violations of patient confidentiality are growing. Several e-health and Internet computer security companies are offering insurance protection against financial losses caused by their products, seeking to capitalize on physicians' fears. However, experts warn that these products can be expensive, may not cover all penalties or losses, and may duplicate existing insurance coverage.

Key Takeaways:

  • At least three companies, including iMedica Corp., Counterpane Internet Security Inc., and ComTrust L.L.C., are offering warranties or insurance products to protect doctors against financial losses caused by computer system errors or hacker breaches.
  • These products are mainly targeted at large organizations and can be expensive, with prices ranging from thousands to millions of dollars.
  • Experts caution that these products may not cover all penalties or losses, including criminal penalties imposed by HIPAA.
  • Physicians may already have existing insurance coverage that includes protection against financial losses due to computer system errors or hacker breaches.
  • Contracts with information systems companies may require them to comply with laws, including HIPAA, making warranties or insurance products unnecessary.

Statistics:

  • $199: monthly subscription fee per doctor for iMedica Corp.'s guaranteed product against financial penalties.
  • $12,000: base price per month for Counterpane Internet Security's security services, which can be upgraded with additional coverage of up to $100 million from Lloyd's of London.
  • Up to $1 million: warranty protection offered by ComTrust L.L.C. for its Internet security products.
  • $100,000 to $5 million: warranty protection offered by Counterpane Internet Security to customers who pay a base price of $12,000 a month.

Sources:

  • "iMedica Corp." article in an unnamed publication (exact date unknown)
  • "Counterpane Internet Security" article in an unnamed magazine (exact date unknown, July edition)
  • Alpharetta-based ComTrust L.L.C. press release (exact date unknown, June edition)