Cyber Insurance for Veterinary Practices: What's Covered and What's Not

When the computers shut down at a veterinary hospital, everything from X-rays to billing stops. Increasingly, those disruptions are not accidental; they’re the work of cybercriminals. According to AVMA Trust data, more than 11,000 veterinary clinics are hit by cyberattacks annually, and the average insurance claim runs to $135,000. Despite those numbers, most practices remain unconcerned about the threat.

The cyber insurance industry has taken notice. Specialized carriers like AVMA PLIT and Vetinsure now compete alongside major insurers such as The Hartford, Travelers, and Chubb to offer policies tailored for veterinary practices. These plans aim to soften the financial blow when hackers strike. But as with all forms of insurance, the fine print matters. What’s covered can keep a business afloat. What’s excluded can leave it gasping for air.

We will examine the heart of veterinary cyber insurance, what protections it delivers, where the gaps lie, and how practices can make informed decisions.

Core Protections for Veterinary Practices

Modern cyber insurance policies have grown more sophisticated, providing broad protection against the most common and costly digital threats. At their best, they act as a financial life raft when a practice finds itself submerged in crisis.

Here are the key coverages veterinary clinics can typically expect:

• Data breach response costs: Forensic investigations, legal services, and breach coach support are often included. The Hartford’s CyberChoice First Response, for example, covers the average $214 per record cost to manage a veterinary data breach.
• Ransomware and extortion coverage: Now standard across most policies, this protection became urgent after the 2019 Ryuk ransomware attack disabled more than 400 veterinary hospitals owned by National Veterinary Associates. Insurers like Chubb and AIG offer specialized ransomware endorsements to cover payments and negotiation support.
• Business interruption coverage: When practice management systems like AVImark or Cornerstone go offline, revenue grinds to a halt. Travelers’ CyberRisk policy offers compensation for lost income, including dependent business interruption when vendors or cloud providers fail.
• Client notification and credit monitoring: State laws require practices to notify clients within 60–90 days of a breach. Policies cover the costs of mailing notices, setting up call centers, and providing 12–24 months of credit monitoring.
• Legal and regulatory defense: CNA’s NetProtect 360 and similar policies cover defense costs for lawsuits and regulatory inquiries. Some even cover PCI-DSS fines, which can run as high as $100,000 monthly for noncompliance.
• Reputation management and PR support: AVMA PLIT policies, among others, provide funds for public relations campaigns designed to preserve client trust after an incident.

Taken together, these protections can mean the difference between a temporary disruption and a permanent closure. But coverage has limits, and exclusions often create dangerous blind spots.

Common Exclusions That Leave Practices Vulnerable

Despite their promise, cyber insurance policies rarely offer blanket protection. Insurers build in exclusions that can leave veterinary practices exposed at the worst possible time. Understanding these gaps is just as critical as knowing what’s covered.

The most common exclusions include:

• War and terrorism: Following disputes like the NotPetya case involving Mondelez and Zurich, many policies exclude state-sponsored cyberattacks. For veterinary practices, that means attacks traced to foreign governments may be uninsured.
• Failure to maintain security standards: If a clinic lacks basic protections such as multi-factor authentication, timely patching, or endpoint monitoring, insurers may deny claims. Smaller practices without IT staff are particularly at risk here.
• Employee dishonesty or insider threats: Coverage is often excluded if an employee acts maliciously or negligently, and senior management “knew or should have known.” Yet Chubb reports that 58 percent of healthcare breaches stem from human error, not external hacking.
• Unencrypted devices: Lost or stolen laptops, tablets, or drives containing unencrypted client data are almost universally excluded from coverage. With veterinarians increasingly working on the move, this gap looms large.
• Physical hardware damage: If a cyberattack fries a server or workstation, insurers generally won’t pay for replacement. Those losses must be covered under property insurance.
• Professional services exclusions: Some policies won’t cover malpractice claims tied to cyber incidents, such as when a delayed diagnosis occurs because records are inaccessible. Practices must coordinate cyber and professional liability coverage carefully.
• Third-party infrastructure failures: Outages from utilities or internet providers typically fall outside cyber insurance coverage, even if they cripple operations.

Each of these exclusions highlights why veterinary practices must not only read the fine print but also implement strong cybersecurity practices. Insurers expect a baseline level of defense, and failing to meet it can mean being left uncovered.

Why Veterinary Practices Are Unique Targets

Unlike many small businesses, veterinary hospitals juggle sensitive client payment data, electronic medical records, and even networked diagnostic equipment. These interconnected systems create distinctive vulnerabilities:

• Practice management software: With AVImark holding a 41% market share, attackers know a single exploit can cripple a large swath of clinics.
• Client payment data: Credit card numbers, bank details, and insurance claim records are valuable commodities for hackers.
• Telemedicine platforms: As more states legalize virtual veterinary care, attackers have gained new entry points through portals and apps.
• IoT medical devices: Connected X-ray machines and lab analyzers can serve as gateways into clinic networks.
• Regulatory complexity: While HIPAA doesn’t cover animal records, it does protect client personal information, and state rules vary widely.

The bottom line: Veterinary practices are not just medical providers. They are healthcare-adjacent businesses with financial and technological exposure that rivals human hospitals.

Choosing the Right Policy

The average veterinary cyber insurance policy costs about $145 per month with a $2,500 deductible. Standard coverage limits start at $1 million per occurrence, but larger practices often seek up to $5 million. Still, the sticker price tells only part of the story.

To select wisely, practices should:

• Scrutinize sub-limits: Business interruption may cap at $250,000, far below what a major practice could lose in weeks of downtime.
• Check retroactive dates: If a breach occurred before the policy date, coverage may not apply.
• Review waiting periods: Business interruption coverage often kicks in only after 8–24 hours.
• Seek veterinary expertise: AVMA PLIT, Vetinsure, and similar providers understand the industry’s unique risks.
• Confirm telemedicine coverage: Not all policies explicitly include virtual consultations.
• Look for proactive services: Programs like Travelers’ Cyber Risk Services, which has reduced breach risk by 20% for participants, can add value beyond payouts.

The Bottom Line

Cyber insurance for veterinary practices has matured from a niche product to an essential safeguard. While exclusions around war, employee dishonesty, and unencrypted devices remain serious concerns, comprehensive policies can shield practices from the six-figure average claim costs.

The threat landscape is only growing sharper. In Q2 2023 alone, ransomware attacks struck more than 1,300 victims, a 67% jump from the previous quarter. Veterinary practices, intertwining medicine, finance, and technology, sit squarely in the crosshairs.

For practice owners, the message is clear: cyber insurance is not an optional expense. It is a critical tool for protecting operations, safeguarding client trust, and ensuring that when the hackers come knocking, the clinic’s doors can stay open.