Just over 30 years ago I started out in what has become my passion and specialism, technology insurance for the Life Science and Medical Products sectors. It was an exciting time for technology both in fiction and reality. Science fiction was dominating our screens, Star Trek showed us a future of technological prosperity and advancement, whilst Terminator offered us a warning on the perils of robotics and AI. It may have calmed down in the 90’s when romcoms came into their own, but to take Arnie’s famous words, ‘I’ll be back”- technology wasn’t done with us yet.
Back then, Informatics – looking at how information was acquired, stored, communicated and interpreted – was fairly new. Clients were spending millions of investors’ money buying super computers and clever data arrays that could fill a very large room. If you’re into science fiction films then 1983’s War Games gives you an idea of the sort of computing beast some Life Science firms employed – google it and see!
Two years later, these were getting replaced with something the size of a filing cabinet for 5% of the cost. Technological evolution moves quickly. One of the reasons I find the technology sector of insurance so interesting is the constant development which impacts and changes so many other industries. Today, digital health and tech enabled devices are more and more common, especially with the increased use of AI, machine learning and connected devices, technology is continually changing the Healthcare landscape.
As always with these changes, the risks faced by the innovators grow and evolve too. It’s important that you’re aware of these in order to make sure you and your clients are protected in this technological evolution:
As we become more reliant on the use of technology it’s easy to dismiss the possibility of injury, when the reality is that we should be paying more attention to these exposures. Devices that fail to work or just don’t perform quite as well as expected can cause injury or death to the user. This may be due to misuse, bad manufacture or failing to warn users about potential dangers. Whether your business is manufacturing or using devices you need to know that your insurer is fully aware of the involvement and use of them in order to provide you with the correct policy for protection.
Connected Devices may be susceptible to Hacking and in turn allow access into your own or your clients network and data. In turn devices could be hijacked or held to ransom as well as the loss of Personally Identifiable Information, known as PII. Medical PII is viewed as some of the most valuable available on the Dark Web. If someone’s bank details are stolen you can give them a new bank account, you can’t just replace someone’s medical history, making this data extremely valuable to hackers. As well as regulatory action there is also the reputational damage to an organisation A data breach doesn’t just harm your company by the loss of the data, but the negative impact on your reputation can be catastrophic. Because of this your basic Cyber insurance policy may not offer you the full protection your business needs.
Mistakes and Failure
On top of all this, what if the Technology simply fails to work as it was meant to due to an error or neglect in the way it was designed?
The purchaser or promoter of the device may suffer disruption to their business, incurring extra costs as well as lost profits, which they may look to recover from the device supplier.
It is not that difficult to imagine a single hack that causes injury, data and financial loss.
As an example:
A Smart device that monitors/controls absorption rates of a high cost drug. If hacked to give a false reading, a higher or lower dose may be prescribed with the potential for injury, variation to the prescribers costs [extra if more prescribed] or income [less prescribed] and PII stolen too all from the one hack.
Managing the risk
There are tried and tested measures which organisations can take to minimise exposure to these three areas of risk above:
• Start by looking at quality controls and risk management systems. What have you got in place and could it be improved?
• Whether your business is a manufacturer or a purchaser, how you approach contract management is key to saving on any unnecessary costs due to a gap in contracts.
• Take a serious look at your Cyber Security needs, what data are you handling, how is technology used in your business and what is your process in the event of a cyber
breach? Do you have access to experts to help in the event of a breach?
Quality when it counts
It is important that you know what your exposures are, how they can be managed and ultimately protected. The unfortunate reality is that having the wrong cover in place could mean the demise of the very business you have worked so hard to build. This is equally true for an early stage proof of concept firm up to a mature multi-national concern.
At Tasker Technology Risks we are committed to educating businesses whilst providing them with the right protection through insurance. Our expertise in technology risks combined with our passion for the technological evolution means we can help guide you in understanding how to protect your business.
If you would like to know more or any other questions then please reach out and I will be more than happy to help.
Click here to go to the Tasker Technology Page for more product information.