first party vs third party cyber insurance

Cyber Insurance: First and Third Party

When it comes to cyber liability insurance, there are two main types: first party and third party. While some insurance companies include both types, sometimes only one is necessary or affordable. When it comes to first party vs third party cyber insurance, then, what is the best one? That depends on your business and what risks it is under.

First Party

Any part of a cyber attack that directly affects your business is covered by first party cyber insurance. This includes the cost of:

  • The investigation
  • Notifying customers
  • Credit monitoring
  • Reputation repair
  • The extortionist’s demands
  • Data loss recovery and replacement

Third Party

Any types of costs your business needs to make in order to handle third party claims would be covered by this type of cyber risk insurance. These expenses include legal fees for:

  • Legal representative
  • Judgment and damage claims
  • Settlement


Other covered costs include those related to banks and payment card industries in order to cover the re-issuing of credit cards and fines.

Which One?

While the comparison of first party vs third party cyber insurance is often one that is subjective, it is more likely that third party costs would be more severe, as lawsuits can be financially devastating. While a smaller business may only have a small amount of data that could be lost or breached, the legal fees of one person’s claim are the same whether it’s against a large or small company.