Why IT Consultants and MSPs Need Cyber Insurance

As an IT consultant or managed service provider (MSP), you hold the keys to your clients' networks. A single breach — whether through a compromised remote access tool, a phishing attack on your team, or a vulnerability in a managed endpoint — can cascade across dozens of client environments.

Standard general liability insurance does not cover data breaches, ransomware attacks, or the regulatory fallout that follows. Cyber insurance fills that gap, covering first-party losses (your costs) and third-party claims (client lawsuits).

What Cyber Insurance Covers for IT Consultants

First-Party Coverage

Incident response costs: Forensic investigation, breach notification, credit monitoring for affected individuals
Business interruption: Lost revenue when your systems are offline
Ransomware payments: Negotiation and payment (where legal)
Data restoration: Rebuilding corrupted or encrypted systems
Crisis management: PR and communications support

Third-Party Coverage

Client lawsuits: Defense costs when clients allege your negligence caused their breach
Regulatory fines: Penalties from HIPAA, PCI-DSS, state privacy laws
Media liability: Claims related to website content or digital communications

Cost Breakdown: What MSPs Pay for Cyber Insurance

Revenue Range	Annual Premium	Coverage Limit
Under $250K	$800 – $1,500	$1M per occurrence
$250K – $500K	$1,200 – $2,500	$1M – $2M
$500K – $1M	$2,000 – $4,500	$2M – $5M
$1M – $5M	$4,000 – $10,000	$5M+

Pricing depends on your client count, whether you store sensitive data, security controls in place, and claims history.

Top Carriers for IT Consultant Cyber Insurance

Hartford

Hartford covers IT consultants and computer consultants through their technology BOP program. Their cyber endorsement adds first- and third-party coverage to your existing business policy, keeping costs lower than standalone cyber policies. Best for solo consultants and small MSPs under $1M revenue.

Coalition

Coalition offers active cyber insurance with continuous threat monitoring. Their platform scans your infrastructure for vulnerabilities and alerts you before attacks happen. Ideal for MSPs managing 20+ client environments who want proactive risk management.

Cowbell

Cowbell specializes in cyber insurance for small and mid-market businesses. Their AI-driven underwriting means faster quotes and coverage tailored to your specific tech stack. Good for MSPs using common RMM and PSA platforms.

Chubb

Chubb provides enterprise-grade cyber coverage with high limits and broad policy language. Best for larger IT firms with $2M+ revenue or those working with regulated industries (healthcare, finance).

MSP-Specific Risks You Must Cover

Supply Chain Attacks

If a tool you deploy (RMM software, backup solution, security agent) gets compromised, your clients are exposed. Cyber insurance covers the resulting claims — but check that your policy includes "dependent business interruption" and "supply chain" language.

Client Data Exposure

MSPs routinely access client credentials, financial records, and protected health information (PHI). A breach at your end can trigger HIPAA or state breach notification requirements across multiple clients simultaneously.

Ransomware Targeting

MSPs are high-value ransomware targets because encrypting your systems can lock out dozens of downstream businesses. Verify your policy covers ransomware payments and associated business interruption.

How to Bundle: Cyber + Tech E&O

Most IT consultants should bundle cyber insurance with Technology Errors & Omissions (Tech E&O). While cyber covers breach-related losses, Tech E&O covers claims when your professional services fail to perform — missed deadlines, software bugs, or implementation errors.

Bundling typically saves 15–25% versus buying separate policies.

Coverage	Cyber Insurance	Tech E&O
Data breach costs	✅	❌
Client sues over failed project	❌	✅
Ransomware response	✅	❌
Software defect claim	❌	✅
Regulatory fines	✅	Sometimes
Business interruption (cyber)	✅	❌

Security Requirements to Qualify

Most carriers now require baseline security controls before issuing cyber policies:

Multi-factor authentication (MFA) on all remote access and admin accounts
Endpoint detection and response (EDR) across managed devices
Regular patching cadence (critical patches within 30 days)
Offline or immutable backups tested quarterly
Security awareness training for all staff
Incident response plan documented and tested annually

Not meeting these requirements can result in higher premiums, reduced coverage, or denial of claims.

Get Your Cyber Insurance Quote

Don't wait for a breach to find out you're uninsured. IT consultants and MSPs can compare cyber insurance quotes from Hartford, Coalition, Cowbell, and other top carriers in minutes.

Compare Cyber Insurance Quotes →

Get matched with carriers that understand IT service businesses. Most quotes take under 10 minutes, and coverage can bind the same day.