What MSPs need to know about cyber insurance policies

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From business interruptions to rising costs of responding to incidents and cyber threats looming as the war in Ukraine continues, cyber insurance companies are no longer taking risks.

Cyber ​​threats increased by 59%, to one in 64 businesses affected in 2022. With remote working becoming increasingly popular, cyberinsurers are adjusting their policies and assessing customer liability based on the preventative measures that managed service providers (MSPs) are taking, including a robust password management system. It is now more important than ever for MSPs to assess their cybersecurity coverage to ensure they are protected in the event of an attack.

What is cyber insurance and how does it benefit MSPs?

Cyber ​​insurance mitigates losses related to cyber incidents such as data destruction and/or theft, extortion demands, hacking, denial of service attacks, data breach crisis management activities and lawsuits legal action for defamation, fraud and violation of privacy. Cyber ​​insurance policies too cover the costs data recovery, system investigation, legal defense, customer repair, etc. This type of coverage benefits MSPs just like any customer; however, many MSPs have more data at risk given the nature of their business. So while the answer to the question of how this would benefit an MSP may seem obvious, let’s now dive into the “why?” “.

Why should MSPs invest in cyber insurance?

You might wonder why a cybercriminal would target an MSP. When a cyber attacker gains access to an MSP’s data, they also gain access to secure customer data, which is the creme de la creme of breaches for a cybercriminal. This is also one of the main concerns of an MSP – how to protect customer data. The sad truth is that many MSPs still don’t see the benefit of investing in cyber insurance. In fact, a recent survey revealed that 35% of MSPs did not have cyber insurance when they fell victim to a cyber attack, resulting not only in a significant loss of funds, but also in the loss of customers and overall brand trust.

Ways to protect MSPs

One question remains: does cyber insurance protect an MSP against breaches? Just as car insurance does not prevent a car accident from occurring, cyber insurance does not prevent a cyber attack from occurring. However, it supports MSPs in a row if an attack takes place.

With cyberattacks on the rise and insurance policy prices rising, there are a few things an MSP can do to make sure their customers know they’re protecting their data.

If you stick to the car insurance scenario, just as you would give your insurer proof of safe driving practices to keep those around you safe, you can also show a cyber insurance provider that you are taking measures to protect customer data with additional resources. As a result, it can increase confidence in MSPs and potentially lower premiums.

Additional steps that can be taken to gain the trust of insurers and customers include:

Withhold administrative data until absolutely necessary. Although it seems simple even with a small number of employees in a company, it is often easy for information to slip through the cracks over time.

Make sure you implement enterprise password management (EPM) software. An EPM solution tracks password security for all MSP employees, and many cyber insurance companies now require MSPs and customers to implement EPM software with multi-factor authentication (MFA) to maintain premiums at a lower level. Features such as a built-in password generator, secure credential storage, and auto-fill credentials help the MSP use strong, unique passwords to protect both systems from the MSP and their customers’ systems.

While MSPs don’t need to shout from mountains that they have cybersecurity insurance policies, adopting policies can be a great way to show customers they’re invested in keeping them safe. and that they want to retain their trust. As a best practice, MSPs and all businesses should step back and assess long-term data protection plans and how it will affect their business as a whole.


About the Author

Mike Hines is Vice President, North America, Channel Sales at LastPass. Last pass provides convenient password and identity management solutions that are easy to manage and effortless to use, helping over 33 million users organize and protect their online lives. From enterprise password management and single sign-on to adaptive multi-factor authentication, LastPass Business delivers superior IT control and seamless access to 100,000 businesses.

Feature image: ©Gorodenkoff


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