As cyber attacks become more common, businesses are looking for ways to protect themselves from potential financial losses. Cyber insurance is one way to do this, but it can be difficult to obtain and maintain according to the Harvard business review and WSJ. Many businesses turn to IT support and managed service providers for help with obtaining and maintaining this insurance coverage. Here we will discuss the difficulties of obtaining and maintaining cyber insurance, and how IT support companies can help.
Cyber insurance losses for carriers is bad news for businesses
Cyber insurance claims have been increasing in recent years due to the growing number of cyber attacks. This is bad news for businesses, as they are now facing higher premiums and more up front documentation to obtain the insurance at much higher rates than even a year earlier. Cyber insurance is becoming more difficult to obtain, and many companies are being forced to turn to more mature IT support and managed service providers for help dealing with the complexity of new requirements. This means increasing IT service costs and insurance premiums.
Do insurance companies want MSP’s on the hook for their clients Cyber Insurance policies?
Insurance companies are increasingly asking Service providers to take on more responsibility to verify their clients’ security controls to be eligible Cyber Insurance claims. This is a burden that many IT Support companies are not prepared to take on, and it is causing some to rethink their involvement in the Cyber Insurance process.
What does this mean for businesses?
The trend of insurance companies asking MSPs to shoulder more responsibility for these Insurance claims is likely to continue. This means that businesses will need to be more careful when choosing an IT support or managed service provider. Make sure you select a partner who is prepared to help you implement solutions to reduce the complexities of Cyber Insurance claims. Otherwise, you may find yourself without the coverage you need in the event of a cyber attack.
What does this mean for the IT Support / MSP companies?
IT Support companies will need to change their strategies and become more involved in protecting their clients with standards like NIST Cybersecurity framework. They will also take on more liabilities for their clients’ coverage which increases the risk to their business. This transfer of risk comes at a cost, and they will need to pass that increase cost to the clients in the form of higher service rates.
Businesses should be careful when choosing an IT Support / MSP and insure they have the appropriate coverage to offset the increased Cyber risk by supporting their company. Businesses may also want to consider having 3rd parties validate information supplied on your insurance forms.
If you need help to help navigate these complexities contact Network Essentials.