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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