Seattle digital health insurance - Puget Sound virtual care, health data, and AI where software is the product.

Because the software is the product. A digital health company's exposure is not a physical defect but a data breach, a privacy failure, or a software or professional-services error, so cyber and technology E&O function as the primary product-liability vehicles rather than supplements to a general products form. Cyber responds to breach and privacy exposure across the protected and consumer health data the company handles; technology E&O responds to software-performance and professional-services failures. Traditional products liability alone is structurally inadequate for a company whose product is code and data.

The My Health My Data Act (MHMDA) is one of the strictest consumer-health-data privacy laws in the country and adds significant obligations above the federal HIPAA baseline. Critically, it reaches consumer health data beyond HIPAA-covered entities - so a company that is not a HIPAA covered entity or business associate can still fall squarely within MHMDA - and it carries a private right of action, which lets individuals sue directly. That combination makes MHMDA a distinctive, litigation-heavy exposure for Seattle digital-health companies that a HIPAA-scoped program does not fully anticipate, so it must be covered alongside HIPAA.

A business associate is a company that creates, receives, maintains, or transmits protected health information on behalf of a HIPAA-covered entity such as a health plan or provider. Most digital health companies that process data for those customers are business associates, which triggers direct HIPAA obligations and a business-associate agreement with the covered entity. That scope drives the cyber and privacy structure of the program, because a breach or privacy failure involving protected health information carries regulatory and contractual liability that the coverage has to be sized to meet.

Software becomes software-as-a-medical-device when it is intended to perform a medical function - diagnosing, treating, or informing clinical decisions - on its own, without being part of a hardware device, and therefore falls under FDA regulation as a device. Once software crosses into SaMD, the program shifts: FDA pathway questions, a device-grade products and technology E&O structure, and algorithm or AI decision-support liability enter what otherwise looks like a pure software placement. Where the software stops short of a regulated medical function, it stays a technology E&O and cyber exposure rather than a device one.