Cyber insurance is foundational for SME business. Yet, a large percentage of SMEs lack this type of coverage, either due to lack of awareness or security de-prioritization. This security gap is actually a significant opportunity for MSPs and MSSPs, who can consult on cyber insurance and provide insurance preparation services. These will enhance the business partnership and grow their revenue. A vCISO platform can help service providers overcome knowledge, time and complexity gaps service providers may have, allowing them to confidently add cyber insurance consulting and preparation to their portfolio of services.
The Overlooked Importance of Cyber Insurance for SMEs
SMEs are generally well-versed in the necessity of various types of insurance. Coverages like employee insurance, property insurance, or liability insurance are often top of mind. SMEs understand that they are fundamental for protecting their business operations and ensuring stability.
However, there is another important type of insurance that SMEs often overlook – cyber insurance. Just like any other type of insurance, cyber insurance coverage checklist is an essential asset for SMEs. It helps protect against the financial and reputational damage caused by data breaches and other online attacks.
Where does this gap originate? There are three main reasons. First, in many cases, SMEs tend to shut down discussions about cybersecurity because they feel overwhelmed by security issues. Traditional vendors often emphasize cyber threats and risks in a way that can feel overwhelming. The continuous stream of horror stories about data breaches and ransomware can cause decision-makers to become desensitized or even avoidant. This results in de-prioritization of the issue.
In other cases, SMEs might lack the knowledge and awareness of the importance of cybersecurity. Only 17% of small businesses have a cyber insurance policy in place. 48% of businesses that have insurance, only purchased it after an attack. As small businesses with small operations, they have a long list of tasks to focus on. Cybersecurity is not always top of mind.
This is exactly where cyber insurance coverage checklist comes in. On the one hand, it is a pragmatic solution to the stress and business threat of cyber attacks. This is exactly like other forms of insurance, for example fire insurance or workers’ compensation, help manage business risk. Cyber insurance helps SMEs manage the financial risks associated with cyber incidents, providing a safety net that ensures business continuity in the face of potential cyber threats.
On the other, it helps relieve SMEs of the need to constantly be aware of security issues. While cyber insurance doesn’t replace security strategies and cis cyber controls (see below), it does provide a safety net that allows SMEs to focus on their core business activities.
The third reason SMEs lack insurance stems from the insurers themselves. Many SMEs actually are looking for cybersecurity insurance, but they need guidance and assistance. With insurers requiring stringent measures and posing complicated demands, it has become difficult for SMEs with limited resources to navigate the requirements and purchase the right policies.
The good news is that this gap can be addressed by managed service providers (MSPs) that can now support SMEs more easily, providing them with greater peace of mind in the face of increasing cyber threats.
Seizing the Opportunity: Cyber Insurance for SMEs
In any case, MSPs and MSSPs can provide SMEs with the necessary guidance and resources to help them understand the importance of cyber insurance and its benefits. They can also offer services that help SMEs navigate the process of obtaining a cyber insurance policy. This can help both service providers and SMEs, resulting in a win-win situation.
By including cyber insurance services in their portfolio – whether as consultants or solution providers – MSSPs and MSPs have a lot to gain:
- Upselling Services – Introducing cyber insurance to the MSP/MSSP portfolio allows for upselling opportunities in two ways. First, providing cyber insurance services on top of existing security services. Second, evaluating the client’s ability to comply with cyber insurance requirements and offering services to close any identified gaps.
- Security Leader Positioning – Offering cyber insurance readiness and consulting services positions the service provider as a forward-thinking and strategic leader in cybersecurity. Clients will view the MSP/MSSP as a provider capable of managing security requirements end-to-end.
- Client Education – Educating clients about the importance of cyber insurance demonstrates a commitment to their overall well-being. This educational approach fosters trust and positions the MSP/MSSP as a partner invested in their long-term success. This is also an opportunity to educate on issues that can help establish a long-term and lucrative relationship.Simplifying Cyber Insurance for Clients – Managing cyber insurance can be complex and time-consuming. By taking on this responsibility, service providers relieve their clients from the administrative burden, allowing them to focus on their core business activities. This can help foster a long-term business relationship.
- Stronger Security Posture – Cyber insurance policies often come with specific security requirements. Helping clients meet these requirements improves their security posture and reduces the likelihood of cyber incidents. This approach builds confidence in the service provider’s ability to deliver on their promise for lower risk.
Service Providers’ Challenges in Offering Cyber Insurance Readiness Services
Despite cyber insurance being essential for their clients, MSPs and MSSPs face several challenges when offering such readiness services
- Complexity – Cyber insurance policies can be complex, with varying coverage options, exclusions and requirements. Understanding and communicating these intricacies to clients can be confusing.
- Time-Consuming – Preparing a client for cyber insurance involves conducting comprehensive risk assessments, implementing necessary security measures and ensuring ongoing compliance. This process can be time-intensive and resource-draining.
- Knowledge Gap – MSPs and MSSPs may not possess the in-depth knowledge required to understand the cyber insurance landscape effectively. This includes understanding the nuances of policy terms, negotiating with insurers, and ensuring that clients meet all prerequisites for coverage.
Leveraging the vCISO Platform for Cyber Insurance Readiness
A vCISO platform is an automated solution that helps MSPs and MSSPs provide expert vCISO services to their clients, including supporting cyber insurance requirements. This includes:
Preparing Clients for Cyber Insurance
The vCISO platform provides a structured approach to get clients ready for cyber insurance. It automates the process of risk assessment, generates relevant policies, identifies security gaps, maps and audits compliance with security and regulatory frameworks, guides the implementation of necessary security measures and provides reports that can be used for auditing. This helps ensure clients meet the prerequisites for coverage and any insurer requirements along the way.
Expediting the Process Through Automation
A vCISO platform relieves MSPs/MSSPs and their clients from manually having to assess, evaluate and audit their security and compliance posture. Instead, automation expedites the process and reduces manual errors. This reduces the time and effort required, allowing for quicker coverage turnaround times.
Centralized Access for Third Parties
The platform enables access to third parties, such as insurance brokers and underwriters. They can view policies, evidence collected, compliance readiness, scanning reports, forensics (both external and internal), assessments, task lists and risk mitigation plans. This transparency ensures all stakeholders have the information they need, to accelerate the underwriting process and abstract away complexities
Knowledge and Expertise
The vCISO platform is equipped with extensive knowledge resources. It provides guidance on best practices, compliance requirements and the latest cybersecurity trends. This helps MSPs and MSSPs fill any knowledge gaps and deliver expert advice to their clients even with limited in-house expert knowledge.
Cyber Insurance and Cybersecurity: A Comprehensive Approach for MSPs/MSSPs and Their Clients
While cyber insurance is a financial safety net for breaches, it is not a replacement for a security strategy. Cybersecurity focuses on preventing incidents and minimizing their impact, while cyber insurance handles the financial fallout. This dual approach ensures that clients are well-protected both technically and financially. Together, both security strategy and cyber insurance offer a comprehensive approach to cyber risk management.
To learn more about how a vCISO platform can help with both security and cyber insurance, book a demo and intro call here.