Cyber Liability Insurance for First and Third Parties
The advent of the internet brought with it certain risks, especially for businesses. Before selecting an insurance policy for cyber liability, it’s important to understand the first party vs third party cyber insurance so you can choose the one that’s right for you.
First Party Cyber Liability
First party cyber liability is mainly for non-tech businesses that take in personal information through an outside system. This type of insurance usually pays for the following:
Notifying clients or those in connection with the breach
Offering protection for identity theft
Recovering data lost in the breach
Overseeing the damage to the brand and rebuilding the image
Third Party Cyber Liability
This type of cyber liability is specifically for companies that own and operate the system where the breach occurred, such as IT businesses. Cyber attacks and malfunctions can leave your clients at risk of identity theft or other stolen information, which can result in lawsuits against your company. These insurance policies cover things like:
Legal fees for defense and settlements
Regulatory investigations and levies
Which one is right for you? That all depends on your business, but understanding and differentiating the first party vs third party cyber insurance allows you and your insurance agent to create a policy that meets your specific needs and protects your customers.