Overview of the HealthTech industry
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.
Some of the biggest risks HealthTech companies face
Most of the exposures HealthTech companies suffer overlap tremendously; they all intertwine with one another in some way. Naturally, this makes navigating these specific risks a massive challenge. The following are the most widespread risks in the HealthTech industry:
Why is Insurance for HealthTech Companies 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.
What are some of the best HealthTech conferences?
To stay in the know, it’s best not only to do your homework but also to network within the industry. Here are some of the most productive conferences that will keep you up-to-date on industry developments We recognize that many 2020 events have been canceled or postponed (due to direction from the World Health Organization (WHO) and the Center for Disease Control (CDC) regarding the COVID-19 Coronavirus) however we thought it would still be a useful resource:
- HIMSS Conference – Healthcare Information and Management Systems Society (HIMSS) is a large organization dedicated to improving the healthcare system. The nonprofit group usually hosts an annual HIMSS Conference.
- Health 2.0 VentureConnect – As part of HIMSS organization, the Health 2.0 event features the latest innovative health-related technologies and offers the chance to network with peers.
- JP Morgan Healthcare Conference – For the 38th year, this JP Morgan event touts as being the largest and most informative healthcare symposium in the industry.
- StartUp Health Festival – Since 2011, StartUp Health has taken place alongside JP Morgan’s conference. However, it’s an invite-only experience.
- Rock Health Summit – An invitation-only event, the Rock Health Summit helps to gather healthcare professionals to participate in candid discussions and multiple workshops.
- HLTH Conference – With four days of inspiring content, HLTH is designed for senior executives in the health industry.
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What Insurance do HealthTech companies need?
Professional Liability Insurance
What it covers:
Also referred to as “Errors & Omissions” or “malpractice” insurance. It covers HealthTech companies if an act, error, or omission committed in the course of the company’s performance of professional services is alleged to have caused a financial loss for a third party.
Why you need it:
Complex litigation is expensive, and there’s a lot that can go wrong for HealthTech companies in particular. The policy responds to the threat of professional service disputes by paying legal fees and judgments or settlements that result from a lawsuit for an alleged failure in the provision of professional services.
General Liability Insurance
What it covers:
This covers the organization from some of the fundamental risks that come with running an organization, such as “slip-and-fall” claims, damage to a third party’s property, products liability claims, damage to rented space, and personal or advertising injury claims.
Why you need it:
It forms the foundation of a risk management program. On top of protecting the company from legal liability caused by bodily injury or property damage, this coverage is usually required in contracts like office leases and vendor agreements.
Cyber Insurance
What it covers:
This coverage protects your organization from lawsuits, fines, and penalties arising from a hacking attack or data breach. It can also reimburse the company for its direct expenses, such as breach notification costs, credit monitoring, data restoration, and forensic analysis.
Why you need it:
If you collect any personal or organizational information, have a “login” feature on your site, integrate with another organization’s systems in any way, have employees who could fall for phishing scams, generate online content (i.e., blog posts), or rely heavily on email communications, you need cyber liability insurance. HealthTech companies have sensitive information on patients, which is a highly visible target for hackers, and it should be protected.
Directors & Officers Insurance
What it covers:
This coverage protects the company and key individuals from liability related to the management of the organization. Companies that indemnify their executives against specific covered claims can turn to their D&O policy for reimbursement. Also, if the organization itself is named in a suit, the policy would defend the entity.
Why you need it:
Ensures the company and its leadership is protected from legal liability related to allegations of breach of fiduciary duty and other management-related claims. It provides the capital required to absorb specific legal costs without mortgaging the future of the entire organization.
Employment Practices Liability
What it covers:
This coverage protects the organization and its management by paying the costs of defending against particular suits from employees or investigations from government agencies. Some common claims include allegations of harassment, discrimination, retaliation, and wrongful termination.
Why you need it:
If you or the organization itself is named in such a claim, the coverage would defend you and pay the judgment or settlement against you. Keep in mind how easy it is for an employee to start an action that requires a legal defense.
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
Types of HealthTech Companies that need Insurance
It’s no surprise that cybercriminals pay no mind as to what kind of company they attack. Plus, human error is merely unavoidable no matter the industry. Here are several 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
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