Cyber Insurance VS Cybercrime Insurance – What’s the difference?

Cyber shmyber. Isn’t all cyber insurance the same?

Unfortunately not. The insurance industry never makes things thaaat easy.

There’s a lot of confusing advice around what is and isn’t covered by cyber insurance. And there’s a big difference between first and third party cover, and hacking and phishing. So in this article, we’re going to explain the difference, and help you work out what you need.

1st party VS 3rd party Cyber Insurance 

First things first, a cyber-attack (AKA being hacked) is a bit like a car accident – there’s the damage to your business (the 1st party) AND potential damage to others involved (3rd parties).

If you’re the victim of a cyber-attack there’s likely to be a direct impact on your business but there may also be a ripple effect on your customers or suppliers too. This is known as cyber 3rd party or cyber liability.

But that’s where the analogy ends. Whilst you can buy 3rd party car insurance cover on its own, cyber insurance usually includes both 1st party and 3rd party cover.

So if I have Cyber Insurance I’m fully covered?   

Not quite. We’ve talked about 1st party and 3rd party cover for cyber-attacks and the good news is that 3rd party cyber liability claims are rare (most cyber-attacks have a direct impact on the company and not their clients).

BUT whilst Cyber Insurance policies cover things like being hacked, they don’t automatically include cybercrimes such as phishing (yep, it doesn’t make much sense to us as a broker either). Phishing is one of the most common and claimed-for types of cybercrime and many people don’t realise that if they were victims of a phishing scam, a standard cyber policy wouldn’t pay out. The good news is that you can easily add Cyber Crime Insurance to your Cyber Insurance policy.

Cyber Insurance VS Cyber Crime Insurance 

Cyber Insurance and Cybercrime Insurance are, remarkably, two very different things.

Cyber Insurance includes:

• 1st party cyber cover – protects your business from a data breach, hacking attempt, system damage and business interruption.
• 3rd party cyber cover (also known as cyber liability) – covers damage to your customers or other third parties as a result of a hacking attempt e.g. loss of sensitive customer information, financial damages or a lawsuit.

Cybercrime Insurance includes:

• Protection against cybercrimes such as phishing. Cybercrime Insurance is AS important as 1st party cyber cover BUT not always included in stand-alone Cyber Insurance policies.

“To be protected against phishing, you need cybercrime insurance. This can be added to a standard cyber insurance policy”. – Theo Pastuch, Cyber Client Director

Breach Response – the unexpected benefit of Cyber Insurance 

Cyber Insurance is highly unusual because the cover isn’t just about the financial payout. Cyber Insurance also includes immediate, high-levels of emergency support within a few hours of a breach. This ‘Breach Response’ service is like a 4th emergency service for your business.

The first hour (known as the ‘golden hour’) after a breach is critical. So the emergency aftermath support that cyber insurers provide is critical too (even if you have internal or external IT support):

• If there’s been a data breach, your insurer can get credit monitoring specialists on board to help identify credit profile changes, which might be a sign of identity theft or fraud.
• If there’s been an extortion attempt, you’ll get support with how to deal with it and the money to pay it (if the decision is taken to pay).
• Your insurer will have PR experts on standby in case of potential damage to your reputation.
• Your insurer will arrange for your IT infrastructure to be forensically checked to close any loopholes or access points and make sure that hackers aren’t still in your system.
• Your insurer will also have legal experts ready to advise and guide you on any legal issues.

Cyber insurance may seem complex but it is a must-have insurance. And we feel so strongly about that, we’ll give you advice even if you don’t choose us as your broker.

Want to make sure you’re covered for hacking and phishing? Speak to our cyber experts Theo, James or Suzanne. 

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