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MSPAlliance Offers Insurance Specifically Designed For MSPs


By Scott Campbell

Managed service providers who find it difficult to obtain affordable insurance for their services can now get help from MSPAlliance, the International Association of Managed Service Providers, according to the group.

MSPAlliance has secured liability insurance for MSPs underwritten by Lloyd's of London and brokered by Hilb Rogal & Hobbs, with a starting price of less than $3,000, according to Charles Weaver, president of MSPAlliance.

"The majority of small and medium MSPs -- and some larger ones -- typically have tech E&O [errors and omissions] insurance in addition to general liability, but it's most likely that these insurance policies do not cover items delivered as a managed service. If you do remote monitoring, the typical tech ENO policy excludes that type of activity. If you lost or breached some information belonging to your client, that wouldn't be covered. It's the same thing with other goods or services sold through the MSP," Weaver said.

The MSPAlliance Professional Liability Insurance includes liability insurance specifically designed for MSPs, offering coverage for claims made due to alleged negligence in the performance of services, Weaver said.

"What makes this unique is that Lloyds of London profiled MSPs. They said 'we are going to profile and make assumptions of how they operate.' They were able to create very specific, expansive coverage that deals with common types of things MSPs do every day," Weaver said. "There is [coverage] for potential loss of data, media liability, general liability of onsite, offsite. That is very atypical of a VAR, solution provider, MSP to get without having extremely good negotiating skills and a good broker. And even if you do get it, you will pay a lot of money for it. That's why this helps the MSPs."

The program has been made affordable because it takes into consideration risk management benefits of being a member of MSPAlliance, Weaver said. In addition, companies who pass the Managed Services Accreditation Program exam can access additional benefits, he said. It also offers additional coverage options for network security and privacy, general liability, directors and officers, and employment practices liability.

MSPAlliance, which has 5,000 members worldwide, has also secured legal defense from the firm Scott & Scott LLP for claims against insured MSPs.

"When we were looking for insurance, our existing broker told us we could not find the coverage we needed for less than $40,000," said Jeffrey Nelson, managing partner of Anexio, an MSP based in Sarasota, Fla., in a statement. "Not only did we get better terms under the MSPAlliance's Professional Liability Insurance, we were able to obtain the coverage at less than one-tenth the cost."