The number and severity of cyber incidents continue to increase on a daily basis. As a result, cyber liability insurance has become critically important to modern business operations as a way to protect against catastrophic losses associated with a data breach or ransomware demands.
Technology has changed the business world, and it is not if one of your clients will get breached, it is when. Therefore, insurance providers are paying out record claims, which leads to it becoming exponentially more challenging to obtain cyber liability insurance. Businesses face tougher requirements and demands in order to get coverage, and cyber insurance costs are increasing every day, making it more difficult to afford quality insurance.
In order to be an effective partner, a managed service provider (MSP) must be aware of the specific requirements that are needed in order to assist their client’s ability to obtain and maintain cyber liability insurance coverage. Furthermore, an MSP that is not providing comprehensive cyber security services may find itself on the outside looking in when it comes to obtaining and keeping new clients.
Why is cyber liability insurance important?
Cyber liability insurance is vital nowadays in order to secure your clients' long-term future. Ransomware has become increasingly prevalent and is affecting businesses of any size. The average ransomware payments, which were once valued at $4000, have skyrocketed to $178,000 demand within the SMB marketplace in just a few years.
These are not insignificant amounts of money, especially for small businesses and in some cases insurance is the difference between staying in business or not - whether it is having the insurance to pay that ransomware demand and get their data back or to restore and repair any lost data it is expensive.
Furthermore, there are reputation damages, lost revenue, regulatory fines, third-party audits, cost of reporting, wages while not doing business, and finally PR assistance to get back or retain clients. Cyber liability insurance has become a critical part of any business operation and the lack of it can have a devastating effect on the long-term viability of your clients’ business.
MSPs can simplify the process
Many organizations are strapped for time and resources and seek support from MSPs to manage their IT environment, particularly when it comes to cyber security, and providing key technologies and solutions to support their clients’ security posture in today’s threat landscape.
MSPs are increasingly partnering with insurance organizations to ensure they understand their individual cyber risk requirements and support their clients to get insurance as well as obtain any discounts available for providing ongoing proof of compliance
MSPs can help clients meet requirements
Cyber insurance is designed to protect businesses against the risks of data breaches and security events. As the number of data breaches and cyber-attacks has increased, many insurers are now requiring certain security requirements to be in place before a policy can be purchased.
MSPs can guide clients concerning overall security posture and undertake the ongoing vulnerability assessment as well as management and technology needed to ensure compliance with cyber insurance requirements. This is particularly important if the security gap in an organization is within its existing technology stack or endpoints. MSPs can provide the right security tools and services to meet the cyber insurance security requirements, such as:
- Vulnerability assessments
- Security awareness training and phishing simulations
- SIEM and/or SOC services (when appropriate)
- Multi-factor authentication (MFA): now a requirement by most companies to qualify for insurance coverage, MFA substantially reduces the risk of account-compromising attacks by requiring a second form of verification on user accounts.
- Up-to-date antivirus, firewall, and malware detection: these basic but fundamental security tools are designed to prevent viruses, spam, and malware from infiltrating networks and protect data.
- Endpoint detection and response (EDR) tool: EDR tools track, monitor, and manage endpoint devices used by the organization in real-time, proactively finding and responding to threats.
MSPs help lower the cost of cyber insurance
There is now little doubt that insurance premiums are rising. In the first quarter of 2022, cyber insurance rates increased by a whopping 110% in the US, and the insurance premium growth is projected to continue over the next several years.
The cost of cyber insurance policy cover depends on the current cyber events and what they expect in the future. The reality is that those threats will change, which will result in different costs and cyber coverage. Organizations with weak risk management demonstrate a higher risk to insurance providers, which then drives up the cost of coverage for all policyholders.
Those companies with low-risk profiles pose less risk and allow insurance providers to provide better rates. Reducing risk comes down to risk management and being able to demonstrate effective cybersecurity management and maturity.
MSPs help clients to leverage technology and solutions that increase their security posture and reduce the risks of cyber-attacks. This not only benefits the business by helping them to meet the security requirements of cyber insurance companies, but it can also help to lower the costs of cyber insurance premiums.
Offer the best security solutions
MSPs can’t afford to take risks regarding their clients’ security. Having robust cybersecurity management in place is vital, as it protects your business and your clients. The ThreatAdvice Breach Prevention Platform is a comprehensive cybersecurity solution that centralizes risk management for MSPs and provides an overview of your clients’ IT environment in the current state.
ThreatAdvice also offers MSP partners a Breach Prevention Warranty option as an augmentation to cyber liability insurance. Speak to ThreatAdvice today about adding their world-class cybersecurity platform to your MSP security solutions.