First-party cyber liability insurance
First-party cyber liability insurance helps cover expenses resulting from a data breach or cyberattack on your business's own network.
What is first-party cyber insurance?
First-party cyber liability insurance covers the expenses your business may incur following a data breach or other cybersecurity attack on your network or systems. It's often bundled with errors and omissions insurance.
For example, if an employee writes down a password and leaves it in plain sight, your business could become the victim of a data breach. First-party cyber insurance could help pay for expenses related to the fallout of the incident, such as customer notification and credit monitoring if client information is stolen.
Who should carry first-party cyber insurance?
As cybercrime continues to rise, more and more companies face an increasing risk of a data breach or cyberattack. To mitigate the potential financial losses resulting from such an attack, it’s important for businesses to have adequate insurance coverage.
Any business that stores data is exposed to cyber risk. Businesses that store sensitive information, such as passwords and credit card numbers, are particularly vulnerable to an attack and should carry first-party cyber insurance.
What does first-party cyber insurance cover?
First-party cyber insurance can help reduce the financial impact associated with a data breach or cyberattack. It can help cover the costs of:
- Business interruption
- Cyberextortion threats
- Customer notification
- Credit monitoring services or anti-fraud protection
- Public relations to help restore a business’s reputation
- Investigation into the source of the attack
What’s the difference between first-party vs. third-party cyber insurance?
The primary distinction between first-party vs. third-party cyber insurance has to do with who experiences the loss. First-party cyber insurance covers the costs of a data breach that happened to the company named on the policy, or the insured.
Third-party cyber insurance provides liability coverage for a business that is responsible for a client’s systems or network. If the business makes a mistake that leads to a data breach or cyberattack on the customer’s network, the client may decide to sue. Third-party cyber insurance can help cover the business’s legal expenses.
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