First-party vs. third-party coverage
In one sentence
First-party covers your own losses (recovery, lost income); third-party covers claims others bring against you.
First-party cyber coverage pays for your direct costs: forensics, restoration, business interruption, ransom. Third-party coverage responds to liabilities from others harmed by an incident (customers, partners), including legal defense and settlements.
Why it's on your cyber insurance application
Worth knowing before you buy rather than during a claim. The split decides which costs the policy actually meets, and it's the clearest question to put to a broker when two quotes look similar on price.
What this looks like in practice
A ransomware event tends to involve both. First-party pays the forensics team, the restoration work and the income you lost while the schedule was down. Third-party responds if the customers whose data was taken come after you. When you compare quotes, compare them per side, because a strong-looking limit can be mostly one or the other.
The written evidence carriers accept
A “yes” on the application needs a document behind it. In the Readiness Pack, that document is:
- Application-Mapping Guide: Which Document Answers Which Question (preview its opening sections)
Related terms
Would you pass this question today?
The free Readiness Check scores you across the ten control domains carriers probe, in five minutes, no email required for the score.