What Is the Difference Between First-Party and Third-Party Cyber Insurance?

FTC guidance separates response and recovery expenses from liability claims. If one event creates both, check whether each section has its own limit or shares the policy’s overall limit.

The distinction matters when comparing quotes: a policy can offer one side more broadly than the other, and different limits or retentions may apply. Check whether response expenses are paid outside or inside the aggregate, who qualifies as a third party, whether regulatory proceedings are included, and what event triggers each section. Also review whether dependent vendors count for first-party interruption or whether their incident creates only a third-party claim.