How the Medical Industry Can Close Coverage Gaps and Stem Huge Losses from Cyber Attacks

A recent Beecher Carlson report highlights potential coverage gaps related to connected medical devices, helping organizations avoid unpleasant surprises.
By: | February 4, 2019 • 3 min read

Connecting medical devices to network systems and the internet greatly enhances their functionality and effectiveness in patient care. But connected devices often provide windows of opportunity for cyber criminals looking for a vulnerability to exploit.


This is an area of increasing concern with the rise of telemedicine and a growing reliance on electronic medical devices throughout every facet of health care. Consider the devastating effects of 2017’s Not Petya attack. While a Ukrainian accounting company was the initial victim of the attack, any company “connected” to them through email or electronic connectivity was quickly infected.

Hundreds of health care organizations, particularly in the UK, were impacted or shut down. The inability to access electronic patient care systems because of a “cyber-weapon” has a direct impact on patient care and could lead to grave errors and adverse patient outcomes.

If a medical device is hacked, every party along the supply chain is at risk, from device and software manufacturers and sellers, to hospitals and individual health care providers. But coverage for those risks is not one size fits all, and significant coverage gaps may exist.

Where Are the Gaps?

Beecher Carlson recently published its Cyber Coverage Handbook for Medical Devices report, highlighting those potential gaps, and offering guidance on how companies can better connect the dots of their insurance programs to close those gaps and avoid unpleasant surprises.

“Understanding the interaction between Professional, product, property, cyber and other insurance policies and implementation of a coordinated insurance program for all conceivable cyber risks is critical to a leading strategy,” wrote the report’s authors.

What’s in the Report?

The report examines coverage concerns from three distinct angles: health care providers, medical device manufacturers including software, service or parts providers, and sellers of medical devices. Exposures and potential gaps can vary broadly for each.

Beecher Carlson’s handbook breaks down risks and coverage options for a half-dozen scenarios related to medical devices, including:

  • Cyber-caused bodily harm to patients
  • Medical device exploit causing business income loss
  • Medical devices used as attack devices
  • Cyber extortion threats
  • Breach of patient confidentiality
  • Recall

Where Else Can I Find Help?


On December 28, 2018, the U.S. Department of Health and Human Services released the “Health Industry Cybersecurity Practices (HICP): Managing Threats and Protecting Patients” publication, which provides voluntary cybersecurity practices designed to reduce security risks and improve security for health care organizations.

With respect to connected medical devices, the Cybersecurity Guidelines recommend that organizations consider these practices:

  • Establish and maintain communication with medical device manufacturer’s product security teams.
  • Patch devices after patches have been validated, distributed by the medical device manufacturer, and properly tested.
  • Assess current security controls on networked medical devices
  • Assess inventory traits such as IT components that may include the Media Access Control (MAC) address, Internet Protocol (IP) address, network segments, operating systems, applications, and other elements relevant to managing information security risks.
  • Implement pre-procurement security requirements for vendors.
  • Implement information security assurance practices, such as security risk assessments of new devices and validation of vendor practices on networks or facilities.
  • Engage information security as a stakeholder in clinical procurements.
  • Use a template for contract language with medical device manufacturers and others.
  • Implement access controls for clinical and vendor support staff, including remote access, monitoring of vendor access, MFA, and minimum necessary or least privilege.
  • Implement security operations practices for devices, including hardening, patching, monitoring, and threat detection capabilities.
  • Develop and implement network security applications and practices for device networks. &
Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.


That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.


Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]