From the Aug./Sept. 2023 MSP Success magazine issue
As cyberattacks continue to increase, many MSPs and small businesses struggle to purchase comprehensive and reasonable cyber insurance to protect themselves and their customers.
The challenge is that getting insurance isn’t easy. As players continue to exit the space, experts predict rates could double, even triple, as coverage becomes increasingly limited and harder to get. Plus, the qualification process can be confusing, time-consuming, and complex, especially for small businesses.
“As an MSP, you wound up having to answer all of these things and every questionnaire for all of your clients,” said Adam Schwam, President of Sandwire Technology Group, an MSP based in Long Island, New York. “There were different insurance companies, all asking the same question five different ways. It just wasn’t clear about exactly what you would need to even get coverage.”
To help solve these problems, Kaseya recently announced its Cyber Insurance Fast Track program, a partnership with Cysurance, a next-generation risk mitigation company that insures, warrants, and certifies security solutions. By using Kaseya’s IT Complete Security Suite, both MSPs and their customers are now eligible for up to $1.5M in coverage without all the complex and lengthy questionnaires at up to 20% – 50% discounts from traditional coverage.
This program relieves a couple of major hassles that both MSPs and their small-business clients typically have with cyber insurance. First off, the entire process can be tedious and complex, requiring you to fill out an application form that can literally take hours. Plus, adequate coverage can be hard to find and expensive. With this program, it’s both easy and affordable.
And the timing couldn’t be better. According to Cysurance’s President, Kirsten Bay, “For so many businesses, cybersecurity can be overwhelming. It’s easier to simply ignore the problem because they just don’t really understand it. This program really enables you to bundle insurance with the security stack, and everything’s taken care of in a nice, neat package.”
This ability to offer a stack of security services and have a recommendation to address cyber insurance enables MSPs to essentially “kill two birds with one stone” by delivering a better outcome for the customer at a lower cost. And not only does this position the MSP in a beneficial way as someone who can solve a serious concern but the solutions are also extremely “sticky.” Clients will be reluctant to leave given the breadth of security services offered by the MSP and the preferred rates on insurance.
“As an MSP, it’s our responsibility to protect our clients and make sure they have the most up-to-date security and IT infrastructure,” said Schwam. “Cyber insurance is one of those vital services they need to keep them safe. Plus, it makes you look good because you become their trusted adviser. You’re making them aware of something they desperately need and you make money because you are providing comprehensive security services.”
Qualifying for the Cyber Insurance Fast Track program can be as simple as answering a few simple questions to receive a personalized quote for both a Certification Warranty and Certified Cyber Insurance.
The Certification Warranty entitles end-customers to $500K of reimbursement for successful cyberattacks against the security stack. Think of this almost like a home appliance or auto warranty you purchase to handle unexpected failures and repairs, but instead, it protects against the following:
Customer Ransomware Attacks
Business Email Compromise Events
Compliance Penalties and Regulatory Fines
Cyber Event Support Costs
Cyber Legal Liability Events
Participants in the Certification Warranty program are then automatically entitled to a $1M flat-rate Certified Cyber Insurance policy. This insurance covers damages resulting from attacks, including the following:
Business Interruption
Digital Asset Destruction
Reputational Income Loss
Cyber Extortion
Incident Response Expenses
Third-Party Expenses
In the event of a breach, the Certification Warranty responds first; for example, if a ransomware, business email compromise, or compliance event occurs. Once exhausted, Certified Cyber Insurance kicks in to cover additional remediation expenses.
“The most important factor for this type of solution for me was the reduction of severity,” said Bay. “Many people don’t know that up to 90% of small businesses use their primary residence as collateral on their loans. A ransomware attack could literally put them out-of-business and have massive financial impacts.”
In terms of cost, the program is extremely competitive especially for those companies served by MSPs ranging from $1,700 per year for companies under $50M in revenue and $2,950 per year for companies between $50M and $100M in revenue. For MSPs looking for coverage of their own business, a Tech E&O plan is provided, specifically built to address service providers, starting at $8,000 per year.
Kaseya designed this program to make it easier to cut through the red tape and get cyber insurance that provides great coverage at a price significantly below what your customers will pay on the street.
If they went looking for coverage at all.
According to Schwam, “When we’d ask our customers, ‘Do you have cyber insurance?’ They’d say, ‘Oh, I’m covered. I’ve got insurance for my business.’ They thought they had cyber insurance, but it was just IT business coverage, which handles things like errors and omissions or liability or blanket. You’d need a separate rider just for cyber. They just didn’t know that, and they were at significant risk.”
Reducing that risk is what drove Kaseya and Cysurance to make this happen. “We believe with the Cyber Insurance Fast Track program, you now have a strong security foundation that MSPs can build upon,” said Bay. “It drives down the cost of insurance to the point where the stack gets paid for in their savings. You can now spend less on insurance and more on security, which is particularly important for small and medium-sized businesses.”
According to independent cyber insurance expert Rusty Goodwin of The Mid-State Group, you do need to carefully evaluate any insurance plan to see whether it fits your situation. “I’ve heard rumors that this program was in the works for years,” said Goodwin, “and while this definitely represents an important and positive step, the program isn’t totally perfect for everyone.”
Goodwin Observed:
It’s Not A Panacea.
The Certification Warranty isn’t unlimited, and it doesn’t cover every possible contingency. Only certain things are covered and for specific amounts. When it says “up to $500,000,” that’s a total figure if everything went wrong at once. On an item-by-item basis, something like ransomware will provide $200,000; with loss of cash or loss of funds, the most you’re going to get is $50,000. So as you would with any policy, read through the terms and definitions carefully to make sure you understand exactly how you’re protected. Additionally, MSPs should consult with a qualified attorney and insurance broker to evaluate coverage and reduce any potential risks.
It’s Possible MSPs Could Find Cheaper Coverage.
The price break isn’t going to be as great for MSPs as it is for their customers. You could probably go to a broker and cobble together some savings for equivalent coverage. But going down this route will definitely require additional time, energy, and effort. You’ll have to decide whether any savings you do obtain are offset by the increased amount of hassle and paperwork involved. You may find it’s simply not worth the trouble, especially since Kaseya has made the process so easy by doing most of that work for you.
Customers Still Need To Run The Numbers.
The customer is going to have to evaluate the investment required for the required Kaseya services. They’ll need to talk their current MSP into using those services, or to their current internal IT department about using them or adding them into the mix. Even so, the fact that lower insurance rates are directly tied to an enhanced security stack should definitely help you make the case that investing in stronger and better cybersecurity solutions is a wise decision for a number of reasons.
It is important for both MSPs and their customers to understand that neither Kaseya, nor the MSP, are brokers or insurance experts. In addition, as an MSP, you must make sure you do not give the impression you’re reselling the insurance. While possibly easy to conclude, it would be illegal for anyone to do so without proper licensing. Successful MSPs position this as a benefit of being a secure MSP and the services they offer as a trusted advisor, they have a program that enables the end customer to get coverage at a reduced rate directly from a licensed provider.
“Kaseya listened to us, put MSPs to the front of the line, and they did something. They got underwriters on board, figured out which products they needed to have to qualify, and then created the package in a way that simplified the process and is profitable for everyone. It’s simple, quick, headache-free, and cost-effective. This is how partnership is done,” Goodwin said.
The Kaseya Cyber Insurance Fast Track Program Is A Great Opportunity
If you’re an MSP, you can now not only provide cybersecurity solutions for your customers but also recommend a provider that offers affordable, easy-to-get cyber insurance that will protect them from the worst-case scenarios.
You’ve now given customers another reason to do something they probably aren’t already doing upgrade their security suite and increase their protection. And when your customer comes to you asking for help filling out an insurance application, you as the MSP can say, “You know what, I want better for you. Let’s not even do that. Let’s go to the Fast Track program and let’s just get you enrolled.”
“Threats aren’t going away, and IT is only going to get more complex in terms of security management,” said Bay. “This is a great way to anchor around those services for customers as they grow. It’s something that allows an MSP to be exceptionally sticky to their customer because it’s going to be a need that will be there forever.”
In many ways, the Cyber Insurance Fast Track program sets a new standard for how cyber insurance gets done. It shows that the security stack doesn’t have to be 100 products deep. With just five key things, you can meaningfully change the risk posture for a business. So, for MSPs who want to go that extra mile to help customers save on the hassle and the expense of cyber insurance, this could be a game changer.
The Mid-State Group’s Executive Consultant, Rusty Goodwin agrees: “This program’s simple, affordable, and easy. I think Kaseya knocked it out of the park.”
Learn more about the Kaseya Cyber Insurance Fast Track program HERE.
