The $500K Wire That Turns an MSP Into the Defendant
with Joe Brunsman, Runs Brunsman Advisory Group. Insurance brokerage in Annapolis serving managed service providers (MSPs), and close to a thousand cyber claims worked
Joe Brunsman runs the Brunsman Advisory Group, an insurance brokerage in Annapolis built around MSPs. He spent fifteen years in the United States Navy, holds a master's in cybersecurity law, and has worked close to a thousand cyber claims. His starting point: before 2020, lawsuits against MSPs effectively did not exist. He went looking and found two, one of them an employment claim. Then the plaintiff's bar noticed an industry with no licensing regime, no statutory protections, and clients who lose real money when something breaks.
We also get into the myth he wants dead. In 11 years, across close to a thousand claims, he has never had one denied. Cyber insurance is cheap and the policies pay. What sinks an MSP is everything around the policy: an indemnification clause pointing the wrong way, a client who skipped their own cover and plans to sue you instead, a definition of technology services narrower than the work you actually do.
What we cover
- Why lawsuits against MSPs barely existed before 2020, and what changed
- How a plaintiff's attorney builds a case, played out through a half million dollar wire fraud
- Whether your client's cyber policy protects you (it protects them)
- Hold harmless and indemnification, one way versus two way
- The claim denial myth: 11 years, close to a thousand claims, zero denied
- Technology errors and omissions (tech E&O) decoded: the four buckets and the one definition to read
- What happens when the claim involves artificial intelligence (AI), a rogue model, or an outsourced security team that missed the alert
- The mutual insurance framing that wins the client conversation
What's inside
- 00:00 Cold open
- 00:28 Welcome, and who Joe is
- 00:51 Did MSP lawsuits exist before 2020?
- 01:54 Plaintiff attorneys specialize, MSPs have no shield
- 02:45 How a plaintiff's attorney sizes up an MSP
- 03:29 The half million dollar wire, played out
- 05:14 Breach litigation goes parabolic
- 07:48 Does the client's cyber policy protect the MSP?
- 09:02 Contractually requiring clients to carry cyber insurance
- 09:49 Hold harmless and indemnification, one way versus two way
- 11:20 Defense in depth for the business itself
- 13:58 Should the MSP carry its own policy anyway?
- 14:57 The claim denial myth: 11 years, zero denials
- 17:07 Subrogation, explained with a car crash
- 20:58 The two ways an MSP gets pulled into a lawsuit
- 21:52 Tech E&O decoded: four buckets, one definition
- 24:36 What if it's an AI claim?
- 26:07 How many MSPs actually carry this insurance
- 27:38 Where MSP liability goes next
- 30:43 The mutual insurance pitch that wins clients
- 32:39 Wrapping up
The guest
Related reading
Built something the industry should hear about?
A niche you own. A pricing change that worked. A near-death moment you survived. Just the story of how you actually built it.