Manatt Health January 5, 2023
Synopsis. The Ohio Supreme Court ruled last week that insurance coverage was not available to a cloud-based medical software provider because, under the applicable insurance policy, “[c]omputer software cannot experience ‘direct physical loss or physical damage’ because it does not have a physical existence.” While acknowledging that software is code-based, the court found that ransomware did not create the physical damage required under the insurance policy, exposing the company to the full costs of responding to the incident. As discussed further below, this decision illustrates how and why health care organizations should evaluate both their cyber risks and their response plans.
Health Care Cyber Risks. The final week of 2022 brought with it two reminders of the continued scourge of...
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