Differences Between First-Party And Third-Party Coverage

​You're looking for insurance. There are many options out there, so it can be tough to know where to start. First-party coverage and third-party coverage are two different types of insurance. Here's a look at the differences.

First-Party vs. Third-Party Coverage 
First-party coverage refers to insurance covering losses that policyholders directly incur. The insured incurs losses beyond their control. Third-party coverage refers to insurance covering losses that external parties cause but for which the insured may be liable. 

First-Party Coverage: An In-Depth Look 
Suffering cyber attacks may entail the insured for first-party coverage. The following are the steps that companies take when they believe they have been victims of cyberattacks. 

An Investigation is the First Thing Done 
The attorneys from the cyber insurance handlers conduct initial investigations. Investigations are necessary to determine whether or not a violation of the state and federal laws has been committed. 

IT Forensics Check 
The information technology data’s security is checked to determine whether or not the companies’ data has been accessed in an unauthorized manner. If there has been unauthorized access, advisers advise the company’s management to change their business passwords and other login details. 

Notifications are Sent Out 
Additional actions that the companies need to take and the outcomes of the cases are sent in the form of notification letters and calls. 

Request for Credit Monitoring Services 
Companies may request accredited organizations to monitor their credit information post-investigation. Monitoring credit information adds an extra layer of security in protecting companies’ data and other details. 

Hire Media Relations Companies 
Businesses may give off the impression that they may be negligent in protecting their assets and properties. So, hiring media relations companies may be necessary to protect the businesses’ reputations. 

Third-Party Coverage: The Process 
Third-party coverage is simpler than first-party ones. But third-party coverage does follow a process, too. 

An Investigation on Action That the Insured May Have Initiated 
An example of a third-party coverage incident is when the insured’s money is hacked due to the absence or lack of online security. CPA firms servicing the companies transfer the funds, unaware that the supposedly ‘necessary’ services and products they pay for involve fraudulent transactions. CPA firms may be held liable for stopping fraudulent transactions. 

The CPA firms are external entities outside the relationships between the insurance handlers and the insured. So, the firms may be accountable for third-party coverages. 

Conclusion 
Don’t take daily situations for granted. Even if untoward incidents beyond your control happen, you may still be liable for the damages. If in doubt, consult your trusted insurance expert or advisor. 

At CSIS Insurance Services, Inc., we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (888) 501-2747 or Click Here to request a free quote. Any coverage discussed is not guaranteed. Please contact us today to go over your policy to ensure your needs are met! We are here and happy to help.