The need for increased cybersecurity measures has many companies looking beyond their IT department for help with protection by data breaches or cyber-attacks. Outsourcing your IT needs opens up a new liability by way of third-party cyber liability. In order to have the right protection in place, you need to understand the first party vs third party cyber insurance coverage.
Your company has a security responsibility to its customers, and the financial assistance for mitigating loss incurred through a cyber-attack or data breach comes through a first-party liability policy. It provides assistance with credit monitoring following a breach, communicating the security issues to affected customers, and funding reputation management campaigns after an incident. Common claims include:
- Data that was maliciously destroyed
- Virus, malware, or software attack
- Server destroyed by a power surge
- Employee accidentally destroys data
- Natural disaster destroys your servers or hard drives
The IT companies that take on the role of establishing, maintaining, or protecting another company’s IT needs have a third-party liability if an incident happens with the contract holder. The experts at Financial Guaranty Insurance Brokers, Inc. warn IT firms of the possibility of being named in a suit against another firm’s cyber losses.
Assess your role in cybersecurity and make sure you purchase the coverage that takes care of your business needs.