When a client suffers a breach, the technical work is only half the battle. The rest is legal, financial, and reputational—and that’s where many MSPs get pulled into disputes. Embedding client-owned cyber insurance into your services closes gaps that your own Tech E&O/Cyber can’t, reduces liability under the MSA, and accelerates recovery for your clients.
Why embed client-owned cyber insurance?
- Prevent finger-pointing and uninsured losses. If the client’s policy is in place and aligned to your stack, claims move faster and disputes cool down.
- Turn controls into pricing leverage. When you can evidence MFA, EDR, immutable backups, patch SLAs, and email security, carriers often reward it. Point clients to the Cyber Insurance Requirements: Minimum Controls Checklist to see what underwriters expect.
The hidden costs MSPs overlook
- Contractual liability via vague MSAs. Broad indemnities, undefined roles, and no insurance requirement make you the default payer when something goes wrong. Clarify responsibilities and require client coverage.
- Churn after incidents. Uninsured losses breed disputes and provider changes; embedded coverage stabilizes renewals.
- Multi-tenant ransomware ripple effects. One event can trigger BI losses across tenants. See typical cost buckets in Ransomware Costs & Coverage: What Happens After an Attack.
MSA weak spots to fix now
- Indemnification: Scope it to negligence; exclude broad “any security issue” language.
- Defined responsibilities: Spell out what you configure/monitor vs. what the client owns (users, third-party SaaS, policy decisions).
- Client insurance requirement: Add a clause requiring active cyber coverage that matches your baseline controls. For a deeper dive, see MSP Risk Management: Client Cyber Insurance Reduces Exposure.
What “embedded” looks like in practice
- Quote coverage alongside onboarding/QBRs. Verify controls once, then renew with fewer surprises. Consider the MSP Partner Program to streamline quoting across your book.
- Align tools to integrations. Use the N-able N-central integration (and your ConnectWise Asio integration) to prefill evidence and accelerate underwriting.
- Tighten incident roles. Document who notifies carriers, who talks to counsel/forensics, and who approves spend; rehearse it quarterly.
Minimal client controls to meet (and prove)
Underwriters consistently look for MFA everywhere, EDR on all endpoints, immutable/off-network backups with test restores, patch/vuln SLAs, and email security/training. Use the Minimum Controls Checklist to gather screenshots/exports ahead of renewals.
Comparison: with vs. without embedded client coverage
| Situation | Without client coverage embedded | With client coverage embedded |
|---|---|---|
| Client ransomware | MSP blamed, uninsured losses pursued | Client policy funds forensics/BI; clearer roles |
| BEC/social engineering | Loss contested; strained MSA | Covered via client cybercrime/social-engineering endorsement |
| Multi-tenant outage | Elevated churn across tenants | Coordinated claims handling; retention narrative improves |
Confirm endorsements for funds transfer fraud/social engineering when quoting.
30–60 day implementation plan
- Update the MSA: Add a client insurance requirement and clarify responsibilities/limits.
- Standardize an evidence pack: MFA enforcement, EDR coverage ratios, backup immutability, patch SLAs, and training metrics—aligned to the Minimum Controls Checklist.
- Build a claims playbook: Who notifies the carrier, counsel, forensics, and when; base it on the flows in Ransomware Costs & Coverage.
- Operationalize quoting: Route deals through the MSP Partner Program and leverage the N-central integration to reduce friction.
Related resources (internal links)
- Cyber Insurance Requirements: Minimum Controls Checklist — baseline controls with proof examples.
- Ransomware Costs & Coverage: What Happens After an Attack — claim cost components and response sequence.
- MSP Partner Program — embed client coverage and streamline renewals.
- N-able N-central integration — quote from your RMM with evidence at hand.
- Embedded Cyber Insurance for MSPs (Guide) — positioning coverage inside your stack.
Ready to require client coverage, tighten your MSA, and de-risk incidents across your book? Start with the MSP Partner Program and align underwriting to the controls you already deliver.