How MSPs Can Make Money With Cyber Liability Insurance
A Win-Win For Both MSPs and Cyber Insurance Companies
Key Points:
- Cyber insurance is becoming an essential cybersecurity service for organizations.
- However, insurance companies have difficulty understanding businesses' technology before protecting them.
- On the other hand, businesses have difficulty understanding cyber insurance and its security controls.
- One insurance company has created a business model to help them understand companies' technology through MSPs.
- In return, the insurance company offers MSPs a small stream of revenue, extra marketing assistance, and a chance to make their services super sticky with the client.
Cyber liability insurance has become the fastest-growing market as evolving threats boost the demand for coverage.
Nearly all businesses today need to protect their technology. However, insurance companies have difficulties understanding businesses' technology before covering them.
On the flip side, many organizations don't understand everything about cybersecurity and its controls, creating a knowledge gap between companies looking for cyber insurance and insurance companies.
One cyber insurance company — SeedPod — is building a business model that allows them to understand businesses' technology through MSPs.
How The Partnership Model Works
MSPs talk about cyber insurance with most businesses they work with. However, many traditional insurance providers don't offer cyber security insurance, leaving organizations stranded and wondering where to get the insurance.
The new business model promises MSP a better cyber insurance story to tell their clients. The SeedPod Cyber company wants to work with MSPs to cover more business.
The insurer's first approach is to review the MSP's tech stack to validate its security approach. If your MSP qualifies, the insurance company will ask if your clients use the same tech stack.
Your MSP will then go to its client base and inform them about the cyber liability insurer. Since your MSP client is using your security solution, you can simplify the application process, help your client save money, and allow the insurer to cover your client better.
In return, the insurance company will offer your MSP revenue stream for the service you provide. You'll also get marketing assistance from the insurance company, recommending you to other businesses.
Alvarez Technology is at The Beginning Phase of The Partnering
Luis, the CEO of Alvarez Technology Group, says they started working with the idea that all MSPs talk to their clients about cyber insurance. However, he wanted to be able to tell their customers that they have someone that could quote them a cyber insurance policy.
The Alvarez Technology Group CEO says that proposing a cyber liability cover to clients already paying them for cyber security services would work great.
As all MSP know — because nearly all deal with cyber insurance issues — insurance companies increase restrictions daily for a business to meet minimum requirements. For instance, organizations must have:
- Multifactor authentication (MFAs)
- Backup and disaster recovery solutions
- Patch management solutions
- Back up — with mainly offline backup
- Data recovery testing
- Security awareness training
- Phishing simulations
MSPs already meet nearly all requirements for many insurance carriers. If your clients adopt all your security measures, the insurance company can readily offer them cyber liability cover. When a business you serve lacks all the tech requirements to acquire cyber liability cover, your MSP can sell them the additional service to make them insurable.
The Growing Demand for Cyber Insurance
Nearly all businesses want cyber insurance. Several reasons are pushing the demand, including:
- The surge in cyber attacks
- Increased regulations to ensure firms are protected
- Clients are asking businesses for cyber insurance
Businesses are getting pressured to get cyber insurance. While many might not be where they want to be in cybersecurity, the collaboration between MSPs and cyber insurance companies can be a seamless way to guide businesses on how to qualify for cyber liability coverage.
Closing the Gap Between Your MSP Clients and Cyber Insurance Company
Many businesses looking for cyber liability coverage and sign the insurance policy without knowing what they're getting into. When they get the application forms, they get many questions they can't answer, which drives them to their MSP.
If your MSP can talk to them about providing all the services required to get them policy, you'll create a win-win situation.
When a client refuses to adopt one of the required security measures that qualify them for a cover — such as MFA — your MSP can make them sign an exception form stating they aren't implementing the solution. If your MSP helps the business fill out the application form, you'll leave the MFA box unchecked because the organization doesn't have it.
While your client will bear all the responsibility after signing the policy, you should guide them not to make false statements because they might be denied a claim for dishonesty.
Bridging the business and the insurer will reduce all the application friction, which might save them costs.
MFA — A Huge Challenge In The Cyber Insurance Market
MFA is a massive challenge in the cyber insurance market overall. Every cyber insurance company asks the MFA question differently, depending on what you cover.
The MFA questions during application can be challenging even for MSPs to answer. Many businesses look up to their MSP to help them through.
The Relationship Between MSPs and Cyber Insurance Company
The only task the cyber insurance company will require your MSP to execute is communicating to your clients about the availability of cyber liability cover. Once the business starts processing the cover, the insurance company will work directly with them from a sales and information-sharing standpoint.
The new collaboration model can be a way for MSPs to solidify their relationships with clients. Once clients tie your managed security services to their cyber insurance, they'll have to rethink replacing you. Otherwise, they'll have to start again to get a cyber liability cover.
Out N' Aboot Can Help Your MSP Diversify Its Marketing Approach
Many MSP owners are preoccupied with marketing approaches they already know about. While no one disagrees that common marketing strategies are critical and powerful, they can't be the only ones.
You can rely on many other marketing plans to get desired results. Contact us today for more marketing strategies to help your MSP make more money.