Cyber Risk Insurance is Hot and You Need to Add it to Your Security Services
Companies are rightfully fearful of cyberattacks. Breaches, malware, bots, viruses and ransomware make regular appearances in the headlines and cost companies millions of dollars while damaging reputations and shaking consumer confidence.
Billions of accounts have been compromised in recent years, and the costs keep adding up. Companies lose customers and revenue with every attack. Each lost or stolen record costs $225 on average and each major breach means businesses lose millions (if not billions of dollars). By the end of 2021, cybercrime-related damages totaled $6 billion and are expected to cost upward of $10.5 trillion by 2025.
Well aware of the risks cyberattacks represent, many companies are investing more money than ever on their digital defenses. But just like any investment, they want a clear return on it as well. One way to protect themselves from unnecessary costs in the event of a breach despite their best efforts to prevent one is through cyber insurance.
What is cyber insurance?
Cyber insurance policies – just like any other insurance – are all about mitigating risk. In this case, it is providing some financial protection in the event of a cyberattack or other breach.
Cyber insurance policies usually cover post-incident investigation costs, business losses due to the breach (both direct revenue and long-term reputation damage), ransomware-driven extortion costs, customer notification and related costs, as well as protection from lawsuits that may arise as a result of the incident.
Cyber insurance has been around for nearly 15 years and premium are expected to exceed $7.5 billion next year. These products are offered by mainstream insurers such as Travelers, Chubb, Progressive, Nationwide and Allianz.
Why you want your customers to buy it
Even if your MSP is insured, that policy doesn’t extend to your customers. They need to get their own insurance and encouraging clients to purchase cyber insurance as part of their overall security strategy has multiple benefits for MSPs.
- It’s the right thing to do
Cyber insurance may still be optional, but any company that utilizes digital technology whatsoever could benefit from cyber insurance. However, for companies with IT needs so significant they’re considering an MSP engagement, there is no question they need this level of protection.
- It justifies your security services engagement
Some prospects and customers may be skeptical about just how much security they really need. As the party trying to sell them these services (and who will stand to profit when they purchase additional ones), an MSP’s suggestions and best practices may be taken with a grain of salt.
Introducing a cyber insurance company into the equation legitimizes your recommendations. Knowing that a service isn’t just “nice to have” but is actually a pre-requisite to getting insured makes it a much easier pill for clients to swallow.
- It protects you as well
No one wins when there’s a security breach or other incident, but when your customers already have a cyber insurance policy in place, there’s a much better chance your MSP will come out of it unscathed.
Offering cyber insurance risk assessments
This service is a specific, dedicated engagement to ascertain how well protected a company is against security threats. The MSP will run through a battery of tests and surveys to ascertain what is up to par and which areas still need improvement.
Based on the results, the company profile and scores are shared with insurance underwriters who will then determine if a company is adequately protected to qualify for coverage or make recommendations on what must be upgraded and improved to be eligible. Insurance companies can also use this data to finalize its rates and deductibles.
Compliance Manager has compiled the application forms from all the top cyber insurance carriers, extracted the technical requirements and built them into our platform. You can optionally select one or more insurance carriers to create the specific “standard” to which your customer must comply. The Compliance Manager platform does the rest.
Want to find out more about Compliance Manager and how it can help you create lucrative cyber insurance service offerings? Request a demo of Compliance Manager today.