Cyber Insurance: First-Party vs. Third-Party Coverage

Quick answer

First-party cyber coverage generally addresses certain costs the insured business incurs directly after a covered cyber event. Third-party coverage generally addresses certain claims, demands, or lawsuits brought against the insured by customers, clients, regulators, or other parties, subject to the policy terms.

Examples of each

First-party examples may include incident response, data restoration, business interruption, cyber extortion, and certain notification costs. Third-party examples may include privacy liability, network-security liability, regulatory proceedings, and certain media liability claims.

First-party coverage

Review sublimits, waiting periods, vendor requirements, consent provisions, breach-response services, system-failure wording, ransomware conditions, and business-interruption calculations.

Third-party coverage

Review the definitions of privacy event, security failure, claim, wrongful act, insured, and covered data. Also review defense costs, regulatory coverage, contractual exclusions, and territorial scope.

What to review

Cyber forms vary substantially by carrier. Compare coverage grants, exclusions, ransomware controls, social-engineering or funds-transfer provisions, dependent business interruption, retention amounts, and incident-response requirements.

Related resources

• Cyber Liability Insurance
• Business Insurance
• Knowledge Center

Coverage note: Insurance coverage varies by insurer, policy form, endorsement, limits, exclusions, and the facts of a claim. This article is general educational information and is not a substitute for reviewing the actual policy.