Cyber Insurance: An Exciting Business Opportunity for MSPs

Author: Diana Harter, Audience Marketing Manager at WatchGuard Technologies

Did you know that globally, businesses face a ransomware attack every 11 seconds? This is a 20% increase from two years ago (Dataprot). Last year, 43% of cyberattacks targeted small businesses (Forbes). In a recent poll WatchGuard conducted, 69% of participants (primarily end users) indicated that they have cyber insurance, and 20% are investigating getting it. With the rise of cyberattacks on organizations, many are turning to cyber insurance to protect themselves against the financial losses incurred from cybercrime.

However, it’s getting increasingly complicated for end users to get cyber insurance independently. Due to the rising number and increased sophistication of cyber breaches, cyber insurance companies are expecting significantly increased requirements in the technology and service capabilities of policyholders. What used to be a few checkboxes is now a multi-page systems audit. This is too much for many businesses to understand and/or manage, so they need MSPs to help them qualify for and attain insurance.

?“We’re seeing that it’s more difficult for small to medium enterprises to obtain cyber insurance. Clients are wondering why. And they’re looking for trusted advisors to help them unpack what they can do. They need more controls and more solutions to be able to obtain cyber insurance. The benefit to us [MSPs] is that we’ve been already talking about these types of solutions, so we’re front of mind when they need these services,” said Calvin Engen, Chief Technology Officer at F12.net (Canada).

“When we’re going through (cyber insurance policy) reviews or filling out those forms, every year we’re getting more questions. The auditors and insurance companies are asking more intense questions. And it doesn’t align with some of the other security policies that are coming out of the government currently. We can help advise how to fill these (insurance forms) out so that they can get approved. It’s important, complex, and ever-changing. And it’s part of our role as MSPs to help our clients be cared for,” said Kevin Willette , Chief Executive Officier at Verus Corporation (United States).

?Helping customers qualify for and attain cyber insurance presents an exciting business opportunity for MSPs to help customers build a comprehensive security architecture into their tech stack. While not all global regions have adopted this new managed service, we are seeing great success with our partners, who have successfully qualified customers and even lowered their cyber insurance quotes!?

Hear Jodi Gawf, Owner of All in Technology , and her experience successfully lowering a cyber insurance policy for a customer by auditing and identifying security solutions.?

What Does Cyber Insurance Actually Protect??

IBM’s 2023 Cost of a Data Breach Report indicated that the cost of a data breach has reached a new record high with a global average cost of $4.45M. Keep in mind that even with robust cybersecurity measures set in advance, no organization is immune to attacks. This is where having cyber insurance along with our Unified Security Platform architecture helps! See the different insurance policy types here.

Hopefully it’s clear that both MSPs and their clients should protect themselves with cyber insurance to keep financially protected in the event of a breach.

MSPs Are Uniquely Positioned to Help Customers Attain Cyber Insurance

MSPs are perfectly positioned as a trusted advisor for qualifying and attaining cyber insurance assistance for their customers. Not only are MSPs experts in cybersecurity, they also know and manage their clients’ IT infrastructures. They have in-depth knowledge and experience in implementing and maintaining security solutions, which is valuable when assessing an organization’s cyber risk profile and security posture.

Insurance providers have strict criteria for policy approval. MSPs can conduct comprehensive cybersecurity assessments for their customers to see where they meet the criteria and where they fall short. They can identify vulnerabilities, recommend improvements, and help clients implement effective security measures to reduce their overall cyber risk. Cyber insurance companies often require policyholders to demonstrate good cybersecurity practices, making MSPs instrumental in preparing clients for coverage. This truly is an opportunity for MSPs to deliver new solutions and services to customers and be the central, unified source for customer security needs.

Cyber insurance isn’t a one-time transaction, it’s a long-term commitment to the customer’s cybersecurity and financial protection. As MSPs continue to advise and build integrations needed in the future unified security architecture, including ongoing reviews and reports of their customers’ security posture and alignment with evolving coverage requirements, customers come to depend on their expertise to keep them safe, protected, and in compliance.

When cyber insurance consultation is offered as a service, it’s a win-win-win for insurance companies, MSPs, and customers. Insurance companies are confident that their policyholders have robust security solutions when monitored by MSPs. MSPs have a consistent revenue stream from this type of service, which gives them an annual opportunity to review and assess their customers’ security infrastructure. And finally, customers are better protected and managed to ensure lower cyber risk and financial loss from a breach.

Don’t Get Left Behind…

Cyber insurance is being adopted across all industries, especially as cybersecurity regulations mandate data protection measures and, in some cases, require cyber insurance as part of its compliance. For example, the General Data Protection Regulation (GDPR) in Europe includes provisions related to data breach notification and liability, which can incentivize organizations to have cyber insurance in place.?

Businesses are becoming more informed about cyber risks and the potential financial impact of cyber incidents. This awareness is prompting organizations of all sizes to seek insurance coverage as a hedge against breach costs and consequences. As cyber insurance adoption rates continue to rise, MSPs have a truly exciting business opportunity to provide solutions and services that help customers qualify for and maintain coverage.