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Digital Healthcare Booms Amid Rising Cyber and AI Risks – CFC Report Finds

Posted on April 11, 2025April 11, 2025 By Martin Hinton

CFC, a specialist insurance provider, reports that the global digital healthcare industry is booming, driven by technology advancements and shifting patient expectations. Now, the cyber risk part. CFC’s latest Digital Healthcare Report highlights key trends shaping the sector, emphasizing the rising risks from cyber threats, AI liability, and telemedicine practices.

FC logo featuring overlapping blue shapes and lowercase 'cfc' text in dark blue. Used in article about their report on Digital Healthcare Risks.
AI Liability and Data Privacy Concerns

Liability associated with AI usage is rapidly shifting from bodily injury claims toward data privacy and regulatory compliance issues. CFC reports that one-third of claims still involve bodily injury, but most now arise from cyber and technology errors. AI-driven tools help streamline healthcare processes but also expose providers to new legal and data breach risks. Over the past two years, the number of AI-related startups seeking insurance has increased by 67%, reflecting this shift.

Escalating Cybersecurity Threats

Cyber threats remain a significant issue, driving 25% of all eHealth claims. Cyber incidents, like data breaches, account for 38% of total claim costs, primarily due to ransomware, which represents 70% of cyber claim payments. As healthcare moves increasingly online, patient data becomes more attractive to cybercriminals, leading to higher risks and more significant losses.

Rapid Growth and Global Expansion

CFC’s digital healthcare portfolio has seen substantial growth, particularly in the US, Australia, Ireland, and Denmark. New inquiries surged by 40% in the US and 92% in Australia. Emerging markets, including Ireland (222% increase) and Denmark (241%), have seen remarkable demand growth.

The Rise of Telemedicine and Medical Weight-loss Claims

Medical weight-loss prescriptions are a rising claim category, now impacting over eight insuring clauses. Increased online prescribing practices without thorough patient checks have caused more adverse reactions, such as liver and kidney damage. Many of these claims fall outside traditional medical malpractice coverage, highlighting the need for specialized digital healthcare policies.

Regulatory Challenges

The report notes the growing complexity of regulatory frameworks. This is particularly the case with AI accountability and teleprescribing practices. With new laws like the EU AI Act and evolving FDA guidelines, digital healthcare businesses is facing the need to navigate in word of increased oversight. Currently, regulatory fines and costs now account for 11% of claims.

Claims Trends and Future Risk

Two-thirds of claims now involve new issues. These include intellectual property disputes, advertising liability, or cybercrime. As with so many other areas, human error remains a leading cause of cyber incidents, though sophisticated ransomware attacks are increasingly common and severe. CFC predicts AI liability and cybercrime will become even greater concerns in the coming years, alongside increased regulatory scrutiny of medications prescribed digitally.

Other News: Healthcare Industry Cybersecurity Earns ‘B+’ in SecurityScorecard Report.(Opens in a new browser tab)

Martin Hinton

Martin Hinton is the Executive Editor and Publisher of Cyber Insurance News and Information. With over three decades of journalism experience across six continents, his work encompasses investigative reporting, documentaries, and coverage of cultural, political, and business news. To learn more about his career, click on his name to visit his LinkedIn page.


Cyber Insurance, Cyber Insurance for Healthcare, Cybersecurity, Cybersecurity Report Tags:AI liability, CFC Insurance, cyber insurance, cyber liability insurance, Cybersecurity, Digital Healthcare, Healthcare Cybercrime, Medical Weight-loss, Regulatory Compliance, Telemedicine, Teleprescribing

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SMB Cyber Threats - In this episode of the Cyber Insurance News Podcast, host Martin Hinton talks with Dan Candee, CEO of Cork Protection, about the rising tide of cyber threats targeting small and mid-sized businesses (SMBs). Dan shares his journey from Main Street entrepreneur to cybersecurity leader, offering real-world insight into the threat landscape, financial vulnerabilities, and how AI and managed service providers (MSPs) can help fortify business resilience.

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00:00 Introduction - Dan Candee and Cork Protection
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08:26 The Role of Managed Service Providers in Cybersecurity
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