Liability of 21st century medical technology

Two industries collide

Advances in both medical and digital technology have been taking place at lightning speed for the last 20 years or more. Generation X and the Millennials have no concept of life without the Internet, iPods, GPS navigation, DNA testing, laparoscopic and laser surgery, and alternative methods of conception.

From your digital medical records and prescriptions to remote-controlled robotic surgeries, just about everything in medicine is enhanced by if not dependant on wireless technology.

21st century risks

You’re in a minority if your computer or cell phone has never been exposed to spam, hackers, viruses or software and hardware malfunctions. These can result in simple headaches or serious financial and security breaches.

And so it stands to reason that the digital medical devices so many depend on to keep them healthy, or even alive, are also susceptible to the same risks. For example, pacemakers and other implanted devices collect and transmit valuable data from patients to their doctors. Few if any have encryption or defensive mechanisms in place. Imagine a digital virus infecting your pacemaker and crashing the device – and you!

Electronic implants, patient medical data monitors,  electronic insulin dispensers and online diagnostic apps are only a few of the new generation of wireless technologies that, if breached, could expose manufacturers, developers, software companies and others to liability lawsuits.

Will the insurance industry advance just as quickly?

So far, it hasn’t. Insurers currently focus on tangible medical products. But medical devices and smart technology, with particular regard to software and apps, are now nearly one in the same. Adding to the problem is the fact that product liability laws differ among jurisdictions.

The Food and Drug Administration is expected to release regulation recommendations addressing the merging worlds of medical and pseudo-medical devices. New regulations in this area will surely affect the health insurance in my state and any other.

Contact Sadler & Co. for more information on cyber insurance and/or medical products insurance.

Source:Graeme Newman, “Technical and Medical Device Convergence,”  Insurance Journal. 24 Feb. 2014

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Categories: Breach Of Security, Crime, Cyber Liability

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