All You Need to Know About First-Party Cyber Insurance Coverage

A cyberattack can damage not only one but many computer systems of your organization. Additionally, it can damage the reputation of your organization and can put your business at risk. Due to this reason first-party cyber insurance is recommended for organizations. First-party cyber insurance protects businesses against the financial impact of cyberattacks and data breaches.

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What is First-Party Cyber Insurance?

First-Party cyber insurance is designed in a way that lessens the financial impact on the insured company that has purchased the insurance. It covers cyberattacks and data breaches incurred by your business.

First-Party Cyber Insurance Coverage:

Under this type of cyber insurance policy, the following are covered:

  • Provides credit monitoring
  • Communication cost with the affected customers
  • Executing reputation and PR management campaigns
  • Other activities of the recovery

This insurance policy is crucial for organizations that keep sensitive information of the clients or customers online like the credit card number.

Some Common Claim Scenarios for First-Party Cyber Insurance Policy

First-party cyber insurance can provide coverage for a variety of insurable cases, including:

  • Someone destroys your data maliciously
  • A hacker launches a denial of service attack against your business
  • Someone plants malware, virus, or spyware on the hard drive of your computer
  • The hard drive of your computer is destroyed by some natural disaster
  • Someone holds your business data to get ransom
  • An employee destroys the database of your organization accidentally
  • The data from your organization's server wipe out due to a power surge

What is the Difference Between First-Party and Third-Party Cyber Insurance?

Now when you got to know about first-party cyber insurance, let us talk about third-party cyber insurance and the difference between these two.

First-Party Cyber Insurance

Third-Party Cyber Insurance

First-party cyber insurance is used to lessen the financial impact on the insured company. It provides coverage in case of cyberattacks and data breaches at the business.

Third-party cyber liability insurance offers liability protection if the insured organization makes a mistake that results in a data breach or cyberattack on its client.

First-party cyber insurance coverage is somewhat like commercial property insurance. It provides coverage for the company's damage from insured cyber losses.

Third-party cyber insurance is the same as general liability insurance. It provides insurance cover against legal expenses that result from an organization being blamed for causing some other company’s cyber losses.

How to Prevent Cyberattacks?

Buying a cyber-insurance policy& is recommended for businesses and individuals, but taking precautions is always necessary as 'prevention is better than cure'. Today, when hacking is an organized crime and a full-time job of many, it is essential to prevent cyberattacks even despite having insurance. Below-mentioned is some precautions to prevent cyberattacks:

  • Always lock down your login credentials online, more specifically for emails and social media networks by opting for two-step verification.
  • Change your password regularly (at least every two to three months) and use a password manager for saving this information securely. Use a strong password, which is of at least 12 characters with some special characters.
  • It is suggested not to save your credit card details online.
  • At the time of online purchase, use a safe payment option. Generally, credit cards are the safest option as they enable the buyers to seek credits from the issuing company if the product is not delivered or is not what was ordered.
  • Always backup your digital information like your music, photos, videos, health, and financial records, personal contacts by making copies of these data.
  • Upgrade your electronic devices and computer with the latest operating systems and updates.

What is New in 2021 for Cyber Insurance

The cyber insurance policies tighten their underwriting guidelines even before the pandemic in 2020 and they were asking for more details to understand the risk for which they were providing the insurance. Whether it is details of the backup procedure or interrogation over specific security controls, insurance companies are expecting that the underwriting process can be more rigorous in 2021.

After the pandemic, almost all the offices migrated from work in an office, where cybersecurity was controlled, to work from home. This sudden shift presented instant challenges, as cyber attackers took advantage of human vulnerabilities and new security. Some of the major challenges that you face are unsecure connectivity and bandwidth, phishing, social engineering, employee access issues, and other manmade cyber risks.

Cyber insurance policies are there at every step of this way. Most of the policies have responded because of broad coverage language for both types of incidents, which are big and small & whether it covered network outages, financial fraud, data breach, and ransomware.

However, not all cyber insurance policies are the same, and the current pandemic has shown some areas of concern. The policyholders should look at the definitions of their cyber insurance policies 21Q such as the employees who are working from home on their personal computers get coverage.

Summing It Up!

First-party cyber insurance can safeguard your crucial data from potential data breaches, cyberattacks, and other internet-based risks. Therefore, knowing about all the advantages of a first-party cyber insurance policy can help you to make a suitable decision of buying one.

Written By: PolicyBazaar - Updated: 02 March 2022
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Policybazaar for Business - Cyber Insurance - Customer Reviews
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4.3 October 11, 2022
Aarti Singh
Knowledegable Team
The representatives at PolicyBazaar were knowledgeable, patient and genuinely committed to helping me find the best insurance policy for my requirements. They took the time to answer all my questions and provide valuable guidance, ensuring that I had a thorough understanding of the coverage details and terms. THANKS.
Agra
4.3 October 06, 2022
Amit
Quick And Hassle Free
After seeing a rise in cyber attacks in many of the companies, i decided to purchase a cyber insurance policy for my start up. I went on the Policy Bazaar website and learned about the coverage in detail and purchased it from their website only. It was quick and hassle-free purchase.
Nashik
4.5 October 04, 2022
Pinku
Paperless Process
We bought the contractual liability insurance from policybazaar and received the best overall package. The process was paperless as we applied for insurance online and the support was amazing.
Surat
4.5 October 03, 2022
Aashish
Extensive Coverage
We thoroughly checked all the benefits and features and decided to buy a contractual liability policy from Policybazaar. It provides all the necessary features to safeguard our business against any loss.
Ahemdabad
4.5 October 02, 2022
Nishant
Easy To Buy
It was easy to buy insurance from Policybazaar and customer support was also amazing to clear all the doubts. Contractual liability insurance is essential for my business and I could not get a better deal than this.
Udaipur
4.5 October 01, 2022
Puneet
Easy Plan Comparision
An ideal Contractual Liability Insurance policy purchased to protect our business that we ecounter in our everyday operations. Policybazaar offers a platform to compare multiple plans.
Assam
4.5 September 30, 2022
Govind
No Broker And Paper Work
Great experience at Policybazaar. We did not know that buying Contractual Liability Insurance could be that easy. Also there is no broker and paperwork.
Jharkhand
4.8 September 29, 2022
Rinku
Perfect Insurance Coverage
I purchased Contractual Liability Insurance from Policybazaar and the coverage they provided is perfect to keep my hardware business safe various unforeseen instances.
New Delhi
4.5 March 18, 2022
Ishan
Cloud Storage Cover
I wanted to purchase a cyber insurance policy could provide coverage for the data stored in cloud network. I went on the Policybazaar website and look up for plans that would provide me with this coverage. I compared different plans and in a matter of minutes i found the right cyber insurance plan that would fit my requirement.
Ajmer
4.5 March 17, 2022
Anurag
Good User Interface
I was looking for a cyber insurance policy online. After looking for the insurance plan online I landed on the Policybazaar website. Trust me, the user interface of the website is so good that i was able to locate the cyber insurance plan and purchase it in not more than 10 minutes. Thanks Policybazaar.
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