In late 2013, Cottage Health System, the operator of a network of hospitals in Southern California, discovered that hackers had stolen 32,500 patient records.
Cottage was sued for $4.1 million, which was paid by the insurer, Columbia Casualty Co., as provided by the policy.
Now, Columbia is suing Cottage for reimbursement, alleging that Cottage and its third-party vendor, INSYN Computer Solutions Inc., stored medical records on a system that was fully accessible to the Internet because they failed to install encryption or take other security measures as required by the policy terms.
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Rosalie Donlon
Rosalie Donlon is the editor in chief of ALM's insurance and tax publications, including NU Property & Casualty magazine and NU PropertyCasualty360.com. You can contact her at [email protected].
