What’s the Difference Between First-Party and Third-Party Cyber Liability Costs?

No matter what type of service you’re providing, you’re going to need to know a little bit about cyber liability insurance. Technology is everywhere, and every business has the potential to be hit with cyber liability costs.

Cyber liability is going to matter for years to come. However, there are two main types of cyber liabilities to consider: first-party, and third-party. What covers one may not cover the other, and it is important that you have the coverage that you need.

If you’re not sure about the differences between first-party and third-party cyber liability costs, then this blog is for you. This is everything that you need to know.

Why You Need First-Party Cyber Liability

Not having first-party cyber liability can end up being a hassle for many companies, including small businesses. If you’re doing any type of business online, there’s always potential for a data breach. There’s big benefits to being covered consistently, including:

• Letting clients know as soon as a personal data breach is detected.
• Getting the credit monitoring service that’s going to keep your cyber liability in check for the long-term.
• Putting together a public relations campaign meant to restore the reputation of a company after being impacted by a breach.
• Making sure the business stays afloat monetarily while going through this type of hardship.
• If there’s a cyber extortionist and he wants money, someone needs to be there to deliver the funds needed to stop the attack. Having first-party cyber liability can protect from that and more.

Think about it. Email lists. Phone records. Credit card information. It’s all out there in the open once a breach happens. With instant coverage, a business won’t have to suffer alone. This means that people don’t have to worry about their workplace shutting their doors. As for the costs, it doesn’t matter. Protection on an investment should always come first.

However, not all costs from a breach are direct. These indirect costs are considered third-party, and can be incredibly damaging if you are not prepared.

What About Third-Party Cyber Risk Insurance?

People and businesses in general need to be covered if they slip up and let a data breach happen under their watch. That’s what third-party cyber risk insurance is for. Reasons why a claim might be filed include:

• Failure to anticipate the events that led to the data breach happening.
• Misuse, disclosure or theft of confidential information stored on a network.
• Infringement of the right to privacy.

IT firms need it. Other businesses do too. Don’t sell your company short trying to save some money.

About Axis Insurance

At Axis Insurance Services, we aim to help our customers identify their exposures and protect themselves. Founded in 1999, we offer insurance programs to a wide variety of professionals and industries including attorneys, real estate, healthcare, architects, and more, and also have a wholesale division. We pride ourselves on offering flexible insurance coverage tailored specifically to each customer’s needs. To learn more about our solutions, contact us at (201) 847-9175 to speak with one of our professionals.