Reprinted with permission from Oral Health Magazine. Written by Anne Genge and CDSPI.
Why cyber insurance is essential and why preparedness matters just as much
Cyber insurance can feel complex, technical, and sometimes expensive. But in today’s digital practice environment, it has become a standard part of responsible practice ownership.
Owning a dental practice means managing risk thoughtfully. You manage clinical risk, financial risk, staffing risk, and regulatory risk. Cyber risk now belongs in that same category.
According to CDSPI, a not-for-profit organization that works with dentists on financial planning and risk management strategies, many practice owners are already familiar with protecting their practice against other operational risks through insurance and structured planning. Cyber risk is simply the digital extension of that same principle: protecting the systems, information, and patient relationships that allow the practice to operate.
Modern dentistry runs on technology. Electronic records, digital imaging, cloud-based practice management systems, online booking, automated recalls, integrated payment processing, and emerging AI tools all support patient care and business efficiency. These systems are investments that improve outcomes and productivity.
They also introduce exposure.
Cyber insurance plays an important role in protecting practices from the financial impact of ransomware, business interruption, data breach response costs, legal consultation, and regulatory obligations. It provides access to specialized experts during a crisis, including forensic investigators, breach counsel, and communications support. These are resources that would be difficult for a single practice to assemble independently.
At the same time, insurers increasingly expect to see reasonable safeguards in place before issuing or renewing coverage. That alignment between coverage and preparedness is not a barrier. It is part of building meaningful protection.
If you are investing in digital systems to support patient care, investing in protecting those systems is part of doing business well.
In more than 25 years working with dental practices, including the last 15 focused specifically on cybersecurity and data protection, I have seen the landscape evolve from occasional IT disruptions to sustained, targeted cyber risk. What I have learned is this: most dentists are not underprepared because they do not care. They are under-supported because cybersecurity has become a governance issue, not just an IT issue.
Cyber insurance and cybersecurity are partners, not substitutes
A common misconception is that cyber insurance replaces cybersecurity. In reality, insurance is a financial risk transfer mechanism. It assumes that reasonable precautions are already in place.
Today’s underwriting standards commonly require confirmation of safeguards such as multi-factor authentication on email and remote access, secure and tested backups, endpoint detection and response tools, email filtering and phishing protection, documented staff cybersecurity training, and a defined incident response plan.
These requirements reflect claims data and industry experience. Credential compromise and ransomware continue to be leading causes of healthcare disruption. Insurance functions best when it sits on top of foundational controls. According to CDSPI, this alignment between safeguards and coverage has become one of the most important conversations with practice owners. Insurers are increasingly focused on whether key controls are in place, and practices benefit when cybersecurity and insurance decisions are considered together rather than in isolation.
A Canadian example: The City of Hamilton
In February 2024, the City of Hamilton, Ontario, experienced a significant ransomware incident that disrupted a large portion of its municipal IT systems. Public reporting indicates that approximately 80 percent of city systems were affected.
The City had cyber insurance coverage in place. However, during the claims process it became clear that multi-factor authentication had not been fully implemented across its environment. MFA implementation was a condition within the policy framework. Because that control was not fully in place, the insurer did not reimburse the City’s recovery costs.
Public reporting indicates the total recovery and remediation costs were approximately 18 million Canadian dollars.
The lesson from Hamilton is not that insurance failed. The lesson is that policy conditions and implemented safeguards must align. Coverage is based on representations made at the time of application and on the existence of required controls. Even well-resourced organizations can discover gaps between intended protections and documented implementation.
For smaller healthcare practices, that alignment matters even more.
The Canadian regulatory context
Dental practices across Canada operate under both federal and provincial privacy legislation.
At the federal level, the Personal Information Protection and Electronic Documents Act, known as PIPEDA, requires private sector organizations engaged in commercial activity to protect personal information with safeguards appropriate to its sensitivity.
Most provinces also have their own health or private sector privacy statutes, such as the Personal Health Information Protection Act in Ontario, the Health Information Act in Alberta, and the Personal Information Protection Act in British Columbia.
Across these frameworks, organizations are expected to implement reasonable administrative, technical, and physical safeguards, report certain breaches to regulators, notify affected individuals when required, and maintain accountability for privacy governance.
Regulators assess whether reasonable safeguards were in place. Insurance coverage does not replace statutory obligations to protect patient information. Preparedness supports both insurability and regulatory compliance.
Why many practices feel caught off guard
Most dentists are not cybersecurity specialists. In many cases, practices rely on their IT provider to handle security. Traditional IT support often focuses on system uptime, hardware maintenance, and troubleshooting. Governance frameworks, risk documentation, training verification, and insurer readiness may not be explicitly included.
As a result, practices often lack a documented cybersecurity policy, evidence of staff training completion, verified backup testing logs, formal risk assessments, and defined roles and responsibilities for security oversight.
When insurance applications ask detailed operational questions, it can feel overwhelming.
The issue is not neglect. It is complexity. Cyber risk management expectations have evolved quickly, and the documentation requirements are more formal than they were even five years ago.
Governance is the turning point
The transition from uncertainty to confidence rarely comes from purchasing another piece of software. It comes from structure.
A governance-based approach includes clear accountability for cybersecurity leadership, written policies and procedures, regular risk assessments, documented technical safeguards, team wide training, and ongoing monitoring and review.
When these elements are in place, insurance applications become more straightforward. Renewal discussions are less stressful. Regulatory inquiries are easier to navigate. Decision making becomes proactive rather than reactive.
Cyber insurance then becomes what it is intended to be, the financial layer that sits on top of a resilient foundation.
Reframing the investment
Practice owners routinely invest in areas that support growth and stability. You invest in clinical equipment, continuing education, marketing, staff development, and compliance programs.
Cybersecurity belongs in that same category.
It is not a cost centre detached from revenue. It protects the systems that generate revenue. It safeguards patient trust. It supports operational continuity.
Cyber insurance reinforces those protections by providing financial and professional support if an incident occurs. The two are interdependent.
Practical next steps
For practices evaluating cyber insurance readiness, consider confirming that multi-factor authentication is enabled across all user and administrative accounts, ensuring backups are encrypted and regularly tested, reviewing endpoint and email security protections, documenting cybersecurity policies and procedures, providing and recording team-wide training, conducting a risk assessment and remediating identified gaps, and reviewing policy terms carefully to understand coverage conditions.
These steps strengthen both security posture and insurability. As the cyber insurance market evolves, many practices are also discovering that coverage options have expanded. Working with insurance advisors and specialist brokers who understand both the dental environment and the cyber insurance landscape can help practices evaluate solutions that align with their operational needs, technology use, and risk tolerance.
A better question to ask
Instead of asking: Do we have cyber insurance, consider asking: Are we structured in a way that supports both strong safeguards and reliable coverage?
That shift reframes cyber insurance from a transactional purchase to part of a broader resilience strategy.
Digital dentistry will continue to evolve. Technology investments will continue to grow. Protecting those investments and aligning them with meaningful coverage is now part of modern practice ownership.