CaaS: The Key to More Affordable Cyber Insurance
Cyber liability insurance is an essential component of risk management. However, as cyberthreats become more frequent and damaging, the cost of coverage continues to escalate. Businesses now face higher premiums, stricter underwriting standards and even the possibility of coverage denials. Fortunately, organizations can take proactive steps to manage these costs. Compliance as a Service (CaaS) strengthens a company’s posture and defensibility, making it more attractive to insurers. This can result in lower premiums and enhanced protection. Let’s explore how CaaS can help.
Building Cyber Defensibility: The Essentials
Before diving into compliance frameworks, organizations must establish a solid cybersecurity foundation. Key measures include:
- Conducting a Business Risk Assessment – Identify gaps within your security and risk posture and address them proactively.
- Developing and Implementing Security Policies – Establishing incident response plans, conducting tabletop exercises and creating business continuity and disaster recovery plans.
- Enforcing Multi-Factor Authentication (MFA) – Applying MFA across all administrative accounts and, where possible, throughout the organization.
- Maintaining Separate, Immutable and Encrypted Backups – Ensuring data can be restored in case of an attack.
- Implementing Ongoing Vulnerability Scanning and Patch Management – Regularly updating and securing systems.
- Conducting Security Awareness Training and Phishing Simulations – Educating employees to reduce human error risks.
- Deploying Endpoint Protection (Antivirus and Security Tools) – Strengthening defenses at all access points.
Compliance and Cybersecurity: A Natural Connection
Compliance frameworks such as FTC, NIST, ISO, SOC 2 and CMMC are designed to enforce cybersecurity best practices. Whether safeguarding healthcare data, consumer information, or national security assets, these frameworks establish security controls that mitigate cyber risks.
Achieving compliance requires organizations to implement key cybersecurity measures, including risk assessments, access controls, continuous monitoring and employee awareness training. These controls, developed by leading cybersecurity experts, are based on years of experience in threat detection and response. Simply put, a business cannot achieve compliance without first addressing its cybersecurity vulnerabilities. This dual benefit – enhanced security and compliance – directly impacts an organization’s ability to secure affordable cyber insurance.
The Role of Cyber Insurance
Standard business insurance does not cover losses from cyber incidents. If a data incident occurs and the affected company lacks cyber liability insurance, it must shoulder the financial burden alone. Cyber liability insurance is designed to fill this gap. Policies vary but generally cover expenses such as: Incident investigation, legal fees and settlements, customer notifications and credit monitoring. With these financial protections in place, businesses have a much better chance of recovering from a cyber incident. However, securing cyber insurance is becoming increasingly difficult and expensive.
As cyber threats evolve, insurers are reassessing their exposure to risk. This has resulted in stricter underwriting standards, increased premiums and more exclusions in policies. Many insurers now require businesses to demonstrate strong cybersecurity controls before even considering coverage. Some common requirements include multi-factor authentication (MFA) regular data backups, security awareness training and vulnerability scanning and patch management. For many organizations, meeting these requirements can be a costly and time-consuming endeavor. This is where Compliance as a Service (CaaS) comes into play.
How CaaS Reduces Cyber Insurance Costs
Helping clients with cyber insurance applications means ensuring that they have the right policies, processes and controls in place. For one, cyber insurance controls aren’t a one and done thing, it requires continuous involvement. Additionally, helping clients implement even more robust controls can lead to, for example, ISO/SOC2 or other compliance standards, which benefit everyone. For MSPs they will see improvements in Monthly Return Revenue (MRR) and open the door to larger contracts.
Cyber insurance providers are looking for one thing: Strong cybersecurity controls. Businesses that invest in robust security measures are seen as lower risk, making them eligible for more affordable coverage. CaaS simplifies this process by providing a structured approach to compliance and security.
For Managed Service Providers (MSPs) and security vendors, offering CaaS presents a unique opportunity. CaaS providers are already focused on ensuring compliance, and since compliance frameworks align with cyber insurance requirements, the transition is seamless. MSPs and security providers offering CaaS can integrate cyber insurance support into their service model to align directly with what insurers require. Additionally, maintaining documented policies and procedures serves as tangible proof of a company’s cybersecurity maturity, an attractive factor for underwriters. On the flip side, MSPs and security firms helping clients secure cyber insurance can easily transition into offering CaaS. Businesses seeking coverage often need assistance in meeting policy requirements, creating an opportunity for service providers to step in with ongoing compliance solutions.
The Bigger Picture: Compliance as a Business Imperative
The rising cost of cyber insurance is not arbitrary – it reflects the growing financial impact of cyber incidents. Insurers are tightening their risk models, forcing businesses to take a proactive stance on cybersecurity. While this has made obtaining coverage more challenging, it has also incentivized organizations to improve their security posture.
By adopting CaaS, businesses can potentially reduce their cyber risk while positioning themselves for more affordable cyber insurance. For MSPs and security providers, the ability to bridge the gap between compliance and insurance creates new opportunities to deliver value to clients.
In today’s threat landscape, compliance isn’t just another checkbox, it’s a fundamental strategy for long-term resilience and cost savings. CaaS is the missing link that makes cybersecurity and cyber insurance work hand in hand.
