Digital Healthcare Insurance 101

The digital healthcare sector is leading the way with advances in medical care. Running a business in this complex industry isn’t straightforward – and that’s before you add insurance requirements into the mix.

Risks in the digital healthcare and MedTech sectors are complex and varied. They range from the failure of a healthcare device or app that leads to bodily injury to hackers and cybercriminals who may look to manipulate apps and AI systems. And, in the current candidates market, attracting and retaining highly skilled talent is vital to success too.

Partners& is one of the UK’s leading science and technology insurance specialists supporting individuals and organisations in the complex and innovative science and technology sectors with practical, jargon-free advice.

We’ve created this digital healthcare guide as a convenient, plain-English explanation of essential insurance elements for businesses to consider – a route map to building financial resilience for digital healthcare, MedTech and FemTech companies.

Who is digital healthcare insurance cover designed for?

Digital healthcare incorporates a range of technology driven healthcare services, including MedTech and FemTech businesses. Digital healthcare insurance is designed specifically for this sector, such as:

• Telemedicine platforms and providers
• MedTech companies
• mHealth apps
• Remote patient monitoring tools including implantable devices
• AI healthcare
• ePharmacies
• eHealth research involving data collection and analysis

What does digital healthcare insurance cover?

Digital healthcare insurance includes:

• Bodily injury arising from cyber events and system outages
  Healthcare providers are facing new threats to their patients as technology advancements continue to play a more crucial role in how healthcare is delivered, monitored and addressed. In addition to coverage for bodily injury arising out of any negligent act, cover can also provide coverage for bodily injury arising from cyber events and system outages.
• Automatic coverage for physicians and medical practitioners
  The employee classification has become a subject of debate. To eliminate confusion, some policies (although not all) now allow for the definition of ‘employee’ to automatically extend to physicians or medical practitioners offering services on your behalf.
• Technology Errors & Omissions (E&O)
  The supply, development, installation and maintenance of technology has become a pivotal component in the transformation of healthcare delivery. Digital healthcare insurance can provide a separate section for technology E&O as well as breach of contract.
• Products failing to perform cover
  Wearable technology is playing a prominent role in today’s healthcare, particularly in the delivery model which brings care to the patient wherever they are. Cover can be provided for financial loss for any tangible property that has been manufactured, altered, distributed or installed by your company, including wearables and self-monitoring healthcare devices.
• Cyber and privacy
  The cyber and privacy cover has been tailored to address digital healthcare companies’ specific cyber exposures. Not only is there a separate section for extortion to address the growing threat of ransomware, cover also includes the cost of fines and penalties, as well as initial response services.

What other insurance cover might a digital healthcare business need?

In addition to the specialist cover mentioned above, you should also consider the following for your business:

1. Employers’ liability insurance (EL)

It’s a legal requirement in the UK to insure your liability to employees for work-related injury or illness.

• EL protects your business from the impact of legal costs if an employee alleges negligence
• It’s required by UK law for those under a UK contract of employment
• It’s normally purchased as part of a package.

2. Public liability insurance

Public liability insurance protects your business financially where it’s legally responsible for any damage or injury caused by your usual business activities.

Although not a legal requirement, it’s just common sense coverage and may be required as part of a contract. For example, contracts may stipulate the limit you should insure for when it comes to leases for offices/labs.

3. Management Liability Cover (also known as Directors’ and officers’ liability insurance (D&O))

Management Liability insurance can protect your key decision-makers from claims arising from decisions and actions taken within the scope of their normal duties in running the business.

• D&O insurance is usually required by investors
• It’s critical if you’re spending investor cash
• It’s critical if you’re doing business in the USA
• You can extend your D&O to include corporate legal liability and employment practices liability

4. Property insurance and business interruption

Property insurance protects your physical assets, including buildings, improvements, office and laboratory machinery and equipment, computers & data, stock, documents, lab books, prototypes and R&D materials, temperature-sensitive stock and mobile equipment.

Business interruption insurance protects your income streams where there’s an unexpected interruption to business operations. It can help financially with repeat-R&D expenditure, loss of revenue, profit and other unexpected costs.

5. Intellectual property rights (IP) insurance

Just as you wouldn’t hesitate to insure your office contents and other assets, it’s important to insure your organisation’s intellectual property (patents, copyrights, trademarks and the like).

IP insurance gives you financial muscle to defend yourself against allegations of IP infringement, but you can also buy insurance to help you mount legal action against an infringer of your own intellectual property. Some cover is often provided within a Professional Indemnity policy but this often excludes patent and trade marks or the limit may be very small.

6. Key person insurance and shareholder protection

Often required by investors, key person insurance protects your business against the loss of an individual who is critical to the company, either through death or long term illness, and is an important part of your business protection strategy. It’s a form of life insurance that can provide a cash injection to the business if a key individual dies or suffers a serious illness, allowing the business to continue trading at a time of considerable uncertainty and financial pressure.

Shareholder protection insurance provides the funds for the remaining shareholders to buy back shares from the individual or beneficiaries and retain control of the company if a shareholder or partner were to die or be diagnosed with a serious illness. It’s important to make a “company will”: financial provision, not only from the perspective of the company and its owners, but also for their families and dependants.

7. People Risk – Employee wellbeing, engagement and benefits programmes

At the heart of every business, large or small, lies its people, its most valuable, yet unpredictable asset. Employees are now more aware of the importance of their personal health and wellbeing and are looking to their employers for support. The question now facing businesses is, how do they implement an effective strategy to retain their people and attract the best talent? We understand the people challenges facing your business. Our goal is to work with you to minimise your people risk by building a resilient people strategy based around our three core pillars: wellbeing, health and protection.

We’re not just an insurance adviser – we’re a partner in helping you succeed.

Partners& works with cutting-edge innovators across e-health, telemedicine, next-generation health apps, remote patient monitoring tools (for care homes and domestic settings), artificial intelligence, ePharmacies and bespoke medical records software.

Our expert science & technology team can help you protect your business with smart, flexible, high-performance insurance – with a friendly human approach. We understand the risks and pressures you face and we’ll support you with great advice, helping you make the right decisions for your business.

We’ll act as your advocate – negotiating terms, cover and claims with our panel of specialist insurers.

Talk to our team to find out more or visit our website.