With cyberattacks increasing, many firms have invested in cyber insurance or cyber liability insurance. These policies can help reduce their risk in the case of a successful data breach, ransomware attack, or other incident. They also can assist companies in paying for business losses, restoration costs, and, in some cases, recuperating a paid ransom.
However, as insurance carriers’ own costs have risen, they are scrutinizing policy applicants more vigorously, increasing premiums, reducing coverage, adding more exclusions, and increasing deductibles. Often, they ask specific questions about applicants’ cybersecurity posture and may review their existing types of protection before issuing a policy. They will refuse to underwrite or renew the policy if those existing security solutions aren’t up to their standards. In the insurance business, this is referred to as a hardening of the market.
For MSPs and their SMB clients, obtaining a good, affordable policy is getting more challenging. This is the case even as the need for this coverage is increasing exponentially.
How XDR Enhances Cyber Insurance Coverage
MSPs should encourage clients to invest in cyber insurance. However, they must discuss holistic cybersecurity tools and strong security hygiene. These measures can improve their ability to secure favorable policies at competitive premiums.
Adam Khan
Specifically, extended detection and response (XDR) solutions can play a key role in helping meet the requirements of many insurers. XDR provides 24/7 protection across clients’ networks, cloud resources, applications, endpoints, and users. These tools identify threats and initiate automated responses to mitigate the damage caused by breaches. When combined with traditional solutions — such as email protection, backup and data recovery, and multifactor authentication (MFA) — XDR strengthens a company’s overall security posture.
Additionally, MSPs can use XDR and similar solutions to support clients that cannot meet cyber insurance prerequisites. For example, some businesses have encountered difficulties maintaining coverage due to gaps in their security framework. By implementing advanced detection and response systems, MSPs can help clients resolve these issues and retain their insurance coverage.
A Holistic View of Potential Threats Can Reduce Risk, Minimize Disruption
While XDR evolved from endpoint detection and response (EDR), it provides capabilities across all security layers and a holistic view of potential threats.
XDR provides several benefits for policies that require high-level visibility and the ability to respond and contain an attack rapidly. XDR can detect threats across any security layer, as well as when, how, and where they spread. They can also automatically prioritize alerts to help security teams focus on the most critical threats. Plus, these solutions can automatically execute security responses.
As part of a comprehensive security strategy, XDR can help MSP clients reduce risk. Firms that can document this type of good cyber hygiene can potentially reduce their premiums when the policy is initiated and during renewals. This is because their likelihood of making a claim is much lower.
If there is a claim, the insurer is more likely to pay out with minimal delay because they know there are proper security solutions in place. XDR also helps minimize the impact of a breach and the subsequent cost of recovery, which is also appealing to insurers.
MSPs as the Trusted Advisor
Once the client is protected with XDR and other solutions, MSPs can provide guidance in selecting a cyber insurance policy. Generally, a good policy will cover some combination of post-attack forensics, ransom demands/negotiations, restoration costs, legal fees, public relations costs, client and regulator notifications and credit monitoring. Some may also include income loss, business interruption costs, or other items, but this will vary based on the carrier and the specific policy.
XDR solutions can ensure the high level of cyber hygiene that cyber insurance providers want to see from potential customers. With costs and claims rising, insurers want to know that their customers are taking all the necessary steps to protect their data and networks. XDR helps detect, prevent and deter attacks, which can help MSP clients obtain better coverage at a lower premium.
Adam Khan is vice president of global security operations at Barracuda. With over 20 years of experience at companies like Priceline.com, BarnesandNoble.com, and Scholastic, Khan specializes in application and infrastructure automation and security.
Featured image: iStock
