When you first approach liability insurance related to cybersecurity risks, it may be difficult to know whether you need first or third party coverage. Luckily, it is relatively simple to determine which is most appropriate for you and your business once you consider a few key elements of what you do. It is all about how focused your company is on technology.
Who Needs First-Party Coverage?
First-party cyber coverage is appropriate for the vast majority of businesses. It deals with risks like data loss, credit monitoring, identity theft, etc. This is for businesses that don’t specialize in the creation and maintenance of systems they utilize. First party is best for non-tech companies and organizations who face very general threats to their cybersecurity.
Who Needs Third-Party Coverage?
Third-party cyber coverage is more specifically for tech companies, especially those that offer cyber services to other professional groups. Software firms are a prime example of businesses that require third party coverage because they could be held responsible for another company’s data breach. If part of your business is to manage a network for another company, third party coverage is likely the better option for you.
Some companies, like those specializing in IT services, benefit most from a combination of first and third-party liability coverage. If you have any doubts about what kind of coverage you need, speak to an experienced insurance provider for additional guidance.