Cyber Insurance Is Becoming Increasingly Important For MSPs
February 24, 2023
Cyber insurance is becoming increasingly important for MSPs (managed service providers), as the risk of cyber-attacks on businesses is ever-growing. According to a recent report, the cost of a successful data breach averages around $3.86 million dollars per incident, making it one of the most expensive and damaging forms of cybercrime. For this reason, many MSPs are now choosing to invest in cyber insurance policies that offer protection against potential losses resulting from an attack.
Cyber insurance is designed to protect businesses from a variety of different types of cybercrimes such as ransomware attacks, phishing attempts, or data theft. It can cover losses related to business interruption, lost revenues due to downtime caused by an attack, and legal costs associated with managing the aftermath of a security incident. In addition, some policies may even include liability coverage for third party lawsuits that might arise as a result of an attack.
For MSPs specifically, investing in cyber insurance can provide important protection against the financial risks associated with their services. If a customer’s system were to be breached while under the care of an MSP and the company was found liable for any damages incurred, having such a policy would help offset at least some of the economic fallout associated with litigation or other legal battles. In addition, if data belonging to customers and clients are compromised during an attack on an MSP’s environment – leading to financial losses suffered by them – then having appropriate coverage can limit potential liabilities and reduce potential damage awards for which the company could otherwise be held responsible.
Having adequate cyber insurance also allows MSPs to expand into new markets without worry about unexpected costs related to cybersecurity incidents or network intrusions occurring within those environments. This gives companies greater peace-of-mind when signing new contracts with clients located in potentially vulnerable geographic locations because they know they could have recourse if something should go wrong. Furthermore, such policies can also provide valuable assistance in understanding applicable laws surrounding privacy matters, applicable industry regulations and how best to handle notifications when something does occur that requires reporting or other action by management or security personnel involved in Data Protection activities.
Overall, given the growing importance of securing systems – both internally and externally – it is essential that all companies today consider if investing in cyber insurance is right for them based on their particular situation and needs. With an ever-increasing threat landscape that continues to evolve rapidly it is wise for organizations like MSPs who often manage sensitive customer data or online services to make sure they take all necessary steps required in order prevent any serious damage control needed following an incident through proper planning ahead and safeguarding themselves through suitable policy coverages where possible.
TOSS C3 is the trusted Cyber Technology Services provider in Massachusetts specialized in serving law firms, libraries, local governments, and healthcare providers throughout the USA.
Subscribe now and stay up to date with News, Tips, Events, Cybersecurity, Cloud and Data Compliance.