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Cybersecurity lapse costs AvMed $3M | MassDevice.com On Call

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MassDevice On Call

MASSDEVICE ON CALL — AvMed Inc. agreed to update its digital security protocols and pay $3 million to settle a class action lawsuit accusing the company of liability after a 2009 security breach.

AvMed reported the theft of some of its laptop computers, after which some patients reportedly had their identities stolen. A group of patients filed a class action lawsuit claiming the company should have had better cybersecurity measures on its computers.

Under the terms of the settlement AvMed "agreed to implement security awareness and training programs for its employees, adopt new password protocols, upgrade security mechanisms on company laptops, adopt disc encryption technology on company computers, train employees on appropriate laptop use and install physical security upgrades at its facilities," Top Class Actions reported.

Healthcare data breaches have become increasingly common, making so-called “breach insurance” a hot market. Cyber liability insurance has been around for decades, but interest has really picked up in recent years, especially has HIPAA rules have tightened around patient privacy. Breach insurance isn’t a defense measure against intrusion – merely against liability.

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