Small and medium-sized businesses (SMBs) are increasingly targeted by cyber threats, making cyber insurance a crucial component of their risk management strategy. However, obtaining affordable premiums can be challenging without a robust cybersecurity posture.

Modern Managed Service Providers (MSPs) can play a pivotal role in helping SMBs enhance their security measures, thereby qualifying for lower cyber insurance premiums.

The Role of MSPs in Cyber Insurance Readiness

  1. Strengthening Cybersecurity Posture

Insurers assess a company’s cybersecurity measures before determining premiums. MSPs assist SMBs in implementing advanced security solutions, including:

  • Multi-Factor Authentication (MFA): Often times, this is one of the first things insurers look for. MFA reduces unauthorized access risks. A study analyzing Microsoft Azure Active Directory users found that MFA implementation offers outstanding protection, with over 99.99% of MFA-enabled accounts remaining secure during the investigation period. Moreover, MFA reduces the risk of compromise by 99.22% across the entire population and by 98.56% in cases of leaked credentials

  • Endpoint Detection and Response (EDR): EDR solutions monitor and respond to threats in real-time. IBM’s 2024 Cost of a Data Breach Report highlights that businesses employing security AI and automation, including EDR, experienced breach costs of $2.9 million, compared to $6.71 million at businesses without such technologies.

  • Regular Patch Management: Ensures systems are up-to-date against vulnerabilities. A systematic literature review on software security patch management emphasizes the importance of timely patching to mitigate known vulnerabilities and reduce the attack surface .

Implementing these measures signals to insurers a lower risk profile, potentially leading to reduced premiums.

  1. Employee Training and Awareness

Human error remains a leading cause of cyber incidents. MSPs offer comprehensive training programs to educate employees on recognizing phishing attempts and adhering to cybersecurity best practices. Insurers often view well-trained staff as a mitigated risk, which can translate to cost savings on policies.

  1. Developing Incident Response Plans

A well-documented incident response plan demonstrates preparedness to insurers. MSPs collaborate with SMBs to design and implement these plans, ensuring swift containment and mitigation of potential breaches. In 2024 it is that businesses with incident response plans and regular testing reduced the average cost of a data breach by $1.49 million compared to those without such measures .

  1. Ensuring Regulatory Compliance

Compliance with regulations like HIPAA, GDPR, or CCPA is crucial. MSPs guide SMBs in meeting these standards, reducing legal exposures and enhancing insurability.

  1. Continuous Monitoring and Reporting

MSPs provide 24/7 monitoring services, offering real-time threat detection and response. This proactive approach not only safeguards the business but also provides evidence of risk management to insurers.

Leveraging Microsoft Tools for Enhanced Security

MSPs often utilize Microsoft solutions to bolster SMB cybersecurity:

  • Microsoft Defender for Endpoint: Offers comprehensive EDR capabilities.

  • Microsoft Intune: Manages devices and ensures compliance across the organization.

  • Microsoft Entra ID: Provides robust identity and access management with MFA integration.

These tools not only enhance security but also align with insurer requirements, aiding in premium reductions.

Conclusion

As cyber threats escalate, SMBs must prioritize cybersecurity not only to protect their assets but also to manage operational costs effectively. Collaborating with MSPs offers a strategic advantage, ensuring businesses are well-equipped to meet insurer requirements and secure favorable cyber insurance premiums.

Unlock the full potential of Microsoft 365 Copilot for your business. with the Vision and Value Workshop

  • Understand AI reinvention and it’s potential in your business

  • Assess your business’ technical readiness

  • Build a custom business case and implementation roadmap

Andrew Reade

ANDREW READE

Andrew is our Digital Marketing Manager and oversees web-based marketing strategies and content creation for the organization. As a marketing veteran, Andrew has worked with organizations of all sizes in a diverse group of industries, from Risk Management to Transportation. Joining the organization in 2021, Andrew is based in Mobile Mentor’s Nashville, TN office.