In a previous post, Cybersecurity Insurance Fills Important Gaps in Liability Insurance Coverage, we reviewed insurance coverage that is now available to protect companies against potential third-party claims resulting from their failure to protect the private or confidential data of consumers and other businesses.
An important compliment to “third-party” cybersecurity liability insurance is “first-party” cyber-risk insurance. “First-party” insurance coverage protects the insured against losses or damage that the insured itself sustains. Well-known “first-party” coverage includes health insurance and fire, flood, and other coverages afforded under traditional homeowner insurance policies.
In the cyber-risk field, “first-party” coverage protects companies against losses of their own data, damage to information systems caused by a cyber attack, and income lost while systems are off-line following a breach or other catastrophic failure.