Does Cyber Insurance Cover Third-Party Vendors?
Cyber insurance can cover an incident at a vendor when the policy includes dependent-system or vendor coverage; a vendor’s outage alone may not qualify.
FTC guidance recommends assessing vendor security, and policy terms define which outside systems count. Check whether your cloud host, payment processor, or outsourced IT provider is included and whether the trigger requires a security incident.
Check whether the policy covers your data when stored or processed by a vendor and whether the provider must be listed or meet a definition. For interruption, look for dependent-system coverage and its waiting period and sublimit. Review exclusions for service providers, infrastructure, and widespread events. Compare coverage with vendor contract terms, including notice and indemnity duties, because the vendor’s promise does not itself amend your insurance.
Which Providers Offer Cyber Insurance?
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