With the world’s economy and governments disrupted, cybercriminals have reportedly stepped up their efforts to take advantage of the situation. Whether they come from rogue nations, terrorist groups or criminal organizations, cyber-attacks continually evolve in sophistication.
They also steadily strive to broaden their field of action.
No matter how small or remote your organization, you can be vulnerable to cyber-attack. While you should invest in securing your computer systems and software, also consider getting insurance against attacks.
Insurance for cyber-attacks comes in two types: first-party and third-party cyber insurance. Both of them exist to protect your business from damages caused by computer threats.
What Are the Differences Between First-Party and Third-Party Cyber Insurance?
First-party cyber insurance: First-party cyber insurance covers damages and losses caused by cyber-attack on your own business. If you must replace computer systems or contend with erased or compromised internal data, first-party insurance will cover your costs.
First-party insurance coverage also helps businesses cover damages from lost customer credit card information. It pays for issues such as notifying customers, monitoring credit agencies, and public relations campaigns to restore consumer confidence.
Third-party cyber insurance: Third-party cyber insurance coverage protects businesses from data breach lawsuits filed by organizations or individuals directly involved with them. Many lawyers advocating for these victims will name any business or other contractors connected with the organization that experienced the event, even in the smallest of ways.
This style of insurance covers businesses from the effects of these lawsuits. Oftentimes, companies named in suits have little or nothing to do with the breach. Third-party insurance makes sure that your attorney fees, payouts, and other related issues are covered.
Which Type Protects Your Business Best?
The answer to this question depends on your type of business. If you contract with, or even own, a company that stores important personal data, you should carry both types of insurance.
Third-party insurance will protect you from the kinds of lawsuits that can destroy your business.
All companies that store sensitive data internally should consider first-party insurance equally vital. It also protects from potentially destructive lawsuits by customers and can cover internal damages from a cyber-attack.
Crime has entered a new phase. Like many other activities, it has gone online. Your business should endeavor to protect itself with first-party and third-party cyber insurance.