Cyber Risk is one of the biggest risks facing organisations today. Data Breach Incidents are becoming increasingly common today driven by rise in number of ransomware and malware cyberattacks.
Implementing appropriate Cyber Security and Data Protection measures should be the topmost concern of companies. Along with robust data protection measures, companies should consider purchasing a Cyber Insurance Policy with comprehensive coverage as a way to transfer some of the risks associated with Cyberattacks and Data Breach Incidents.
This article will explain the First party and Third Party Coverage provided in a Cyber Insurance Policy and how these coverages can protect businesses from some of the risks associated with Cyberattacks.
What is First-Party Coverage in a Cyber Liability Insurance Policy?
What does First-Party Cyber Insurance cover?
Some of the expenses that are covered under the First Party Coverage in a Cyber Insurance Policy include:
Data Recovery Costs
A Cyberattack often results in loss or corruption of data. First Party Cyber Liability Coverage pays for Data Recovery Costs or Data Restoration Costs following a Cyberattack.
Notification Expenses and Credit Monitoring Cost
The Insured needs to notify the affected customers and offer them Credit Monitoring Services in the event of a Data Breach. Such expenses are covered under the First Party Coverage in a Cyber Liability Insurance Policy.
Cyber Extortion Costs
In many instances, Cybercriminals encrypt important data and demand for a ransom to decrypt the data. First party Liability Coverage in a Cyber Insurance Policy also cover extortion or ransom payments following a Cyberattack.
Engaging Forensic Experts to examine the Insured’s Network and Systems to determine the cause of Data Breach is a substantial expense which is covered by the First Party Liability Coverage in a Cyber Insurance Policy.
Public Relation Expenses
A Cyberattack or a Data Breach Incident will have an adverse impact on the company’s reputation. First Party Coverage in a Cyber Insurance Policy will pay for expenses associated with hiring public relations firms to repair the damage to the company’s reputation.
E-Business Interruption Expenses
Cyberattacks disrupt business operations leading to lost revenue and profits. Cyber Insurance Policies in India reimburse the Insured Party for loss of Gross Profits faced by the Business following a Cyber Event under the First Party Liability Coverage of a Cyber Security Insurance Policy.
First Party Coverage in a Cyber Liability Insurance Policy provides protection by covering expenses and losses following a Cyberattack or a Data Breach Event
What is Third Party Coverage in a Cyber Liability Insurance Policy?
While First-Party Liability Coverage in a Cyber Insurance Policy covers the losses and expenses that a policyholder incurs following a Cyberattack or Data Breach Event, Third-Party Liability Coverage in a Cyber Insurance Policy protects the Insured against legal liabilities that arise from such incidents.
Third Party Liability Coverage is an important coverage under a Cyber Insurance Policy.
What does Third-Party Cyber Insurance cover?
Third-Party Liability Coverage in a Cyber Insurance Policy provides cover for the following:
The Insured Party can be held liable if their customers (Third-Party) cannot use their own Systems following a Cyberattack on the Insured’s systems and the Cyber-Attack was then received into a third party’s System. Third Party Liability Coverage in a Cyber Insurance Policy covers the costs arising from defending lawsuits and paying damages resulting from Conduit Liability.
Impaired Access Liability
The Insured can be held liable for loss sustained by a customer authorised to access the Insured’s System because such access has been impaired or denied resulting directly from Fraudulent Access or Transmission. In short, the Insured’s System becomes unavailable to its customers. Third Party Liability Coverage in a Cyber Insurance Policy covers the costs arising from defending lawsuits and paying damages resulting from Impaired Access Liability.
The Insured can be held liable for loss sustained by a person because of unauthorised access to the subject person’s records by another person provided such access results directly from a Cyberattack into the Insured’s System.
Reputational Liability arises on account of a loss sustained by a person because of disparagement of the Person’s product or services or violation of such person’s right to privacy or publicity resulting from the Cyber Activities of the Insured Party. The legal costs and damages that the Insured is required to pay is covered under the Third-Party Liability Coverage in a Cyber Insurance Policy.
Policyholders can be held liable for copyright infringement, defamation, or other offenses arising out of the Cyber Activities of the Insured. Third-party Liability Coverage covers the costs associated with defending against lawsuits and paying damages resulting from Content Liabilities.
Overall, Third-Party Liability Coverage in a Cyber Insurance Policy provides significant protection for policyholders by covering the legal liabilities associated with a cyberattack or data breach.
Get Best Cyber Insurance Policy Quotes with Qian!
It is important to take the advice of a Cyber Liability Insurance Broker and carefully read through Cyber Insurance Policy Wordings and understand the Cyber Insurance Coverage and exclusions of a Cyber Insurance Policy.
If you wish to purchase a Cyber Insurance Policy, you can email us at firstname.lastname@example.org or call us on 022-22044989. We would be glad to assist you.
- What is a Cyber Insurance Policy?
- What is Cyber Threat or Cyber Risk?
- On Security Insurance Necessity For Businesses
- What does a Cyber Insurance Policy Cover?
- What kind of losses does a Company suffer on account of Cyberattacks and Security Breaches?
- What is the average Cost of a Cyber Incident?
- What are the First Party Liability Coverages under a Cyber Liability Policy?
- What are the Expenses Covered under a Cyber Liability Policy?
- What are the Third Party Liability Coverages covered under a Cyber Liability Insurance Policy?
- Cyber Security Insurance Policy (Why Does It Matter?)
- What are the Exclusions under a Cyber Liability Insurance?
- Cyber Insurance Policy Cost (What is reasonable?)
- Get Best Quotes for Cyber Insurance Policy with Qian