In today’s rapidly evolving digital landscape, the threat of cyberattacks has become a constant concern for businesses of all sizes. As Managed Service Providers (MSPs), you play a critical role in safeguarding your clients’ IT infrastructure, data, and systems. However, as the frequency and sophistication of cyberattacks increase, cyber insurance providers are tightening their requirements—and it’s having a direct impact on your clients’ insurance premiums.
If you’re an MSP without the proper certifications, you might unintentionally be contributing to a rise in your clients’ costs. Insurance companies are now scrutinizing the cybersecurity measures of businesses, and if your services aren’t backed by certifications, your clients could see their cyber insurance premiums skyrocket. Let’s dive into why this is happening and what you can do to stay ahead of the curve.
The Rising Costs of Cyber Insurance
In recent years, the cost of cyber insurance has soared. Insurance companies are faced with an overwhelming number of claims due to ransomware attacks, data breaches, and other cyber threats. To mitigate their risks, insurers are increasing premiums and tightening eligibility requirements for coverage.
One of the biggest drivers behind these cost increases is the lack of proper security measures, especially among businesses that rely on MSPs for their IT services. When insurance underwriters assess a company’s cybersecurity posture, they are now looking beyond internal practices. They also consider the security standards of third-party providers, such as MSPs. If you aren’t following industry best practices or maintaining recognized certifications, your clients may find themselves at risk of higher insurance rates—or even denied coverage altogether.
The Impact on MSPs Without Certification
Many MSPs deliver excellent IT services but lack the certifications that prove adherence to industry-recognized cybersecurity standards. Unfortunately, this is no longer an option in today’s insurance climate. Without these certifications, MSPs run the risk of becoming a liability rather than an asset to their clients.
When clients come back to you saying their insurance rates are rising, it’s often because insurers are flagging gaps in their cybersecurity ecosystem, particularly around third-party partners. In some cases, insurers may even require businesses to work only with certified MSPs to qualify for coverage. The message is clear: if you’re not certified, you could lose clients to competitors who are.
Partnering with Certified Providers: A Competitive Advantage
To address this challenge, MSPs should consider partnering with cybersecurity providers or obtaining relevant certifications to ensure compliance with evolving insurance requirements. Certifications such as SOC 2, ISO 27001, or Cybersecurity Maturity Model Certification (CMMC) can go a long way in proving that your services meet stringent security standards.
By partnering with certified providers or becoming certified yourself, you offer your clients peace of mind that they are working with a trusted partner who meets industry standards. This can also become a powerful selling point in your marketing efforts—positioning your business as not only an MSP but a security-forward MSP. When clients know that partnering with you helps them reduce their cyber insurance premiums, it enhances your value proposition significantly.
Taking the Next Steps
So, what’s next? It’s time to assess your cybersecurity offerings and identify any gaps in your certifications. Are you prepared to meet the rising demands of both insurance companies and your clients?
– Evaluate your current certifications: Are you compliant with industry-recognized standards? If not, which certifications would be most valuable for your service offerings?
– Educate your clients: Inform your clients about the importance of working with certified providers to lower their insurance premiums and improve their security posture.
– Partner with certified security firms: If obtaining certifications yourself isn’t feasible in the short term, consider partnering with cybersecurity firms that have the necessary certifications.
By taking proactive steps to bolster your certifications and partnerships, you can protect your clients, strengthen your reputation, and keep your business competitive in an evolving marketplace.
Cyber insurance and security are no longer optional—they’re essential. For MSPs, certification isn’t just about securing client data; it’s about safeguarding your business relationships. Make sure you’re positioned as a valuable partner in a high-stakes game where the cost of non-compliance is rising daily.
Because in the end, clients leaving you for a certified competitor isn’t personal—it’s about survival in an increasingly security-driven world. Don’t wait for more clients to walk away—invest in the certifications that will protect your business and help your clients meet their cybersecurity and insurance needs.
