How much does Insurance for HealthTech Companies cost?

The cost of insurance for HealthTech companies will depend on several things, including the size of the company and the stage of the company in its development process. Other factors include: Exposures: risks being insured. Company practices: views on safety, compliance, and risk management. Program structure: the amount of deductible and willingness for a company to assume more risk Claims history: the type and amount of past claims against the company

HealthTech Business Insurance

Overview

The HealthTech industry is well-known for being a complex and heavily regulated sector—but for a good reason. HealthTech uses technologies to help patients to receive more efficient, affordable, and convenient care outside of a typical medical office setting. Not only are individuals impacted by this technology, but payers and players in the space are, as well.

Although the growth of healthcare spending is relentless worldwide, it’s still the least digitized space of global markets. Life expectancy is increasing across the globe, and caring for those who are 65 years and older accounts for ⅔ of all healthcare costs. However, providers, insurers, and drug companies are recognizing the potential for digital technology.

Plus, high-deductible healthcare plans have become more prevalent, increasing the out-of-pocket costs for patients. This trend motivates them to be more price-sensitive about healthcare costs. What’s more; is that individuals are more open to innovative healthcare technology, such as via smartphone apps and telemedicine.

Adults using wearables

Roughly 50.6% of adult wearable users wear a smartwatch regularly. As more individuals come to rely on wearable technology, the HealthTech industry must continue delivering dependable products and services.

Data Breach Costs

The average total cost of a data breach in 2020 was $3.86 million and the average cost per individual record that was lost was $150 (IBM).

Why is Insurance for HealthTech Organizations Important?

Healthcare is an industry continually in flux. However, with Baby Boomers requiring more medical attention and younger generations desiring more control in their overall wellness, this market faces unique challenges. Keeping up with the aging population is one hurdle, and catering to a tech-savvy generation is another.

Most of all, HeathTech companies have gathered mounds of medical data—but safely and effectively applying that information is what sets good companies apart from incredibly successful ones. Insurance for HealthTech isn’t only suggested for harnessing the powerful waves of healthcare demands; it’s necessary to keep afloat.

As mentioned, some significant vulnerabilities exist in the healthcare sector. To navigate this terrain, it’s best to prepare for various exposures and to stay updated on current events.

Privacy & Cybersecurity

A quarter of all US data breaches play out in healthcare. Privacy and cybersecurity have never been more daunting for healthcare companies than it is in the modern world. From ransomware to DDoS attacks to costly data breaches, personalized health data is particularly vulnerable to threats because of the high volume of sensitive information.

As with any tech company, data privacy is a massive concern. But, all the while, HealthTech must also comply with HIPPA, PHI, etc. More than mere security breaches, this industry must face accidental data disclosures, human errors, and more threats—mainly from third-party vendors.

Regulatory Compliance

HealthTech companies face unique risks in complying with federal, state, and local regulators—which are often wildly different. Regulatory compliance increases exposure and expense in the healthcare sector. Plus, it also impacts business models significantly. Some of the compliance risks include:

Managing various government payers
Meeting state licensing and practice requirements
Addressing state medical board actions
Interpreting old regulations that are behind the times
Complying with HIPAA

Patient Injuries

Client injuries in any industry typically mean both financial and reputational damage—and the healthcare space is no different. In high-income countries, one in ten patients is injured while receiving care, and 50% of those injuries are preventable. That said, patient injuries could happen for several reasons.

Human error, system breach, technology failure could all cause injuries, to name a few. Preventing or mitigating the aftermath of patient injuries is often a time-consuming and costly endeavor.

Systems Failure

Technological innovation is advancing faster than most companies or regulators can keep pace. These dynamics open the door for plenty of risks, including systems failure. A client’s network could fail or malfunction, vastly lowering the quality of care they receive.

HealthTech companies could be held responsible for costly downtime, damaging both the company’s balance sheet and reputation.

Recommended policies for HealthTech companies

Core Coverage

These coverages form the foundation of any risk management program for HealthTech companies:

General Liability

General liability offers broad protection against some of the most fundamental risks companies face. Known as “slip-and-fall” or “all-risk” insurance, this policy covers personal or property damage and bodily injury occurring on the business premises.

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Workers' Compensation

When employees sustain work-related injuries, employers are typically responsible for their medical costs and lost wages. This policy covers these expenses, protecting employees while simultaneously keeping HealthTech companies running smoothly.

Errors & Omissions

Professional liability, also known as errors and omissions (E&O) insurance, covers companies in third-party or client lawsuits claiming substandard work or service. Work errors or oversights, missed deadlines, budget overruns, etc., often result in costly cases — but E&O insurance responds to these mishaps.

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Cyber Insurance

Cyber insurance protects companies from third-party lawsuits relating to electric activities (i.e., phishing scams). Plus, it offers many recovery benefits, supporting data restoration and reimbursement for income lost and payroll spent.

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Directors & Officers

Shareholders, competitors, investors, etc., can sue a company’s directors and officers, putting their personal assets at stake. Directors and officers (D&O) insurance protects these assets from lawsuits alleging leaders of wrongful acts managing the business.

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HealthTech Specific Coverages

These policies are essential for or can be tailored to the needs of companies operating in the HealthTech space:

Employment Practices Liability

Any company with employees faces the risks of allegations, such as discrimination, wrongful termination, breach of contract, etc. This coverage protects companies against lawsuits related to employment practices.

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HealthTech Insurance Frequently Asked Questions

The cost of insurance for HealthTech companies will depend on several things, including the size of the company and the stage of the company in its development process. Other factors include:

Exposures: risks being insured.
Company practices: views on safety, compliance, and risk management.
Program structure: the amount of deductible and willingness for a company to assume more risk
Claims history: the type and amount of past claims against the company

Types of HealthTech Companies that need insurance

Insurance Companies (e.g., Oscar)
Wearables
Implantables
Home Testing

Genetic Testing
Telemedicine
AI-assisted diagnostic imaging
Remote monitoring

How it works

Finding insurance coverage doesn’t have to be painful. We aim to make the purchasing experience as streamlined & intuitive as possible.

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Use our custom built online portal to get quotes fast. We automate clerical tasks that plague the traditional insurance brokerages, giving us more time to be responsive and alert to your company’s needs.

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Pair with a specialist

No two organizations are the same. Our team of coverage experts partners with your team to engineer your risk management strategy, together. We take the time to understand the intricacies of your company to get you the best possible coverage.

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Stay one step ahead

To do better, you need to know better. With changing political, technological, legal and economic landscapes, staying ahead of the curve is critical.

Our in-house team is tapped into the latest developments of your industry, proactively ensuring you’re covered.

Stay one step ahead

To do better, you need to know better. With changing political, technological, legal and economic landscapes, staying ahead of the curve is critical.

Our in-house team is tapped into the latest developments of your industry, proactively ensuring you’re covered.

Kyle Jeziorski Broking Manager — Kyle Jeziorski, Broking Manager

Meet your specialist

Kyle is the market facing leader at Founder Shield, a boutique insurance brokerage specialized in serving emerging industries. Kyle has been at Founder Shield for 4+ years and in the insurance industry for 9+ years. Prior to Founder Shield, Kyle worked at Marsh on the FINPRO team focusing on management liability in the large private and public space. A graduate of Saint Joseph’s University’s Risk Management and Insurance Program, Kyle has focused his entire career helping clients to navigate through an ever changing risk environment.

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