Digital health and wellness businesses at risk of coverage gaps, says Beazley

Digital health and wellness businesses globally report growing demand and plan to expand but most do not buy a single policy tailored to their industry, increasing the risk of coverage gaps and shortfalls, according to Beazley.

In a new report, Spotlight on digital health and wellness 2022, Beazley states: “There is substantial opportunity for insurance providers to better educate digital health and wellness provider clients of the risks they face and the coverage options available to them.”

The report surveyed digital health and wellness leaders in North America, Asia, the UK and Europe, and found that 72% of the firms surveyed report growth in demand and 99% are planning expansion. However, only 62% of leaders believe they operate in a moderate to high-risk environment, compared to 89% last year’s survey.

The survey found that the top industry-wide risk is cyber. It says that at an industry-wide and global level, the threat of a cyberattack such as ransomware or phishing in 2022 is the top concern for 27% of business leaders, followed closely by technology system failure at 26%.

But the report adds: “At the individual business level, by contrast, it is not cyber, but regulatory threats to their own business that keep almost half (47%) of digital health and wellness business leaders awake at night.”

Jennifer Schoenthal, product leader – global virtual care, Beazley, said: “ Covid-19 has transformed the global appetite for digital health and wellness services. This, along with associated shifts in public health policy in almost every country, have made it easier for people to access health services online. Against this backdrop, every aspect of digital health and wellness services, including telehealth, telemedicine, m-health, healthtech software platforms and life sciences technology, have grown fuelled by a solid track record of innovation, a wave of fresh capital, international expansion plans and patient/customer demand.”

She added: “We as an industry need to continue to stay connected to industry leaders’ concerns and work closely with our clients as their businesses grow and digital health models move forward. We also can look for areas to drive better collaboration to deliver more insightful and responsive, tailored insurance coverage to meet fast-changing customer needs.”

The survey found that many companies lack the coverage they need for everyday risks that could lead to significant claims, and in particular for bodily injury claims arising from digital healthcare, says Beazley. For example, globally 62% don’t have coverage for technology errors or omissions leading to bodily injury, and 69% are not covered for medical malpractice due to incorrect data leading to bodily injury. And only 37% have coverage for bodily injury due to remote care.

Keri Marmorek, claims focus group leader, miscellaneous medical and life sciences, Beazley, said: “The new and unique combination of risks within digital health and wellness services create a complex web of interconnected exposures that can be hard to get to grips with for business leaders, and also for brokers and insurers that are often new to the digital health landscape. Failure to join the dots between these key risks means that underinsurance and gaps in coverage pose an issue for insureds.”

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