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First-party cyber liability insurance

First-party cyber liability insurance protects small businesses against the financial impact of data breaches and cyberattacks.

What is first-party cyber liability insurance?

First-party cyber liability insurance provides financial assistance to mitigate the impact of data breaches and cyberattacks at your small business. It covers the costs of:

  • Communicating with affected customers
  • Providing credit monitoring
  • Executing PR and reputation management campaigns
  • Other recovery activities

What is the difference between first-party vs. third-party cyber insurance?

First-party coverage is designed to lessen the financial impact on the company that bought the insurance (the insured).

Third-party insurance provides liability protection in case the insured company makes a mistake that results in a client or entity suffering a data breach or cyberattack.

Another way of viewing this distinction:

  • First-party coverage is like commercial property insurance. It covers a company’s own damages from covered cyber losses.
  • Third-party coverage is like general liability insurance. It covers legal expenses that result from a firm being blamed for causing another firm’s cyber losses.

What are some common claim scenarios for first-party cyber liability insurance?

First-party cyber insurance can cover a variety of insurable events, including:

  • Someone maliciously destroys your data.
  • A hacker launches a denial of service (DoS) attack against you.
  • Someone plants a virus, malware, or spyware on your computer hard drive.
  • An employee accidentally destroys a database.
  • A power surge wipes out your business server.
  • A natural disaster destroys your computer hardware.
  • Someone holds your computer data for ransom.

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