Dustin Bolander WINs By Simplifying Cybersecurity Insurance for SMBs

Join me as I sit down with Dustin Bolander, a visionary entrepreneur who has carved a path from leading a Managed Service Provider to pioneering a cybersecurity insurance firm.

In a gripping recount of his professional voyage, Dustin outines his transition from IT to the intricacies of the insurance world. Our dialogue journeys through the start of his MSP, Clear Guidance, his strategic focus on law firms, and the epiphany that steered him towards Beltex, where he's reshaping cyber insurance. 

For anyone curious about the alchemy of tech-savvy entrepreneurship and industry know-how, Dustin's story is a compelling testament to the power of experience and adaptation.

In the throes of a digital age where cyber threats loom large, we dissect the tough terrain of cyber insurance and its slow dance with technology. As Dustin and I unravel the challenges, from sluggish industry responses to events like Log4j to the evolving relationship between traditional insurers and MSPs, we reveal the transformative potential of MSP involvement. If you have ever wondered how these cyber guardians can turn the tide on post-incident recovery and redefine the insurance landscape, this insider's look offers a front-row seat to the metamorphosis underway.

Finally, we venture into the labyrinth of launching an insurance company amidst a tangle of regulations and the quest to make cybersecurity insurance accessible. 

From the maze of state-level insurance laws to the creation of Beltex, Dustin peels back the curtain on the daunting yet rewarding process. 

As we wrap up, our exploration emphasizes the indispensable role of MSPs, not just as IT managers, but as critical advisors in cyber insurance. For a deep dive into the confluence of technology, entrepreneurship, and the insurance industry, don't miss this illuminating discussion with a trailblazer who's charting a new course.

Carrie Richardson and Ian Richardson host the WIN Podcast - What's Important Now?

Serial entrepreneurs, life partners and business partners, they have successfully exited from multiple businesses (IT, call center, real estate, marketing) and they help other business owners create their own versions of success.

Ian is certified in Eagle Center For Leadership Making A Difference, Paterson StratOp, and LifePlan.

Carrie has helped create and execute successful outbound sales strategies for over 1200 technology-focused businesses including MSPs, manufacturers, distributors and SaaS firms.

Learn more at www.foxcrowgroup.com

Book time with either of them here: https://randr.consulting/connect

Be a guest on WIN! We host successful entrepreneurs who share advice with other entrepreneurs on how to build, grow or sell a business using examples from their own experience.

Chapters

• 0:00 From Managed Services to Insurance
• 9:57 Challenges and Innovations in Cyber Insurance
• 17:57 Starting an Insurance Company, Navigating Regulations
• 28:17 Insurance Industry Opportunities and Challenges
• 32:09 The Importance of MSPs in Cybersecurity

Transcript

 [00:00:00] Introduction and Background of the Hosts

[00:00:00] Carrie Richardson: . Good afternoon, everybody. My name is Carrie Richardson. I am a partner at & Richardson and your host today for WIN

[00:00:07] Carrie Richardson: what's Important Now? 

[00:00:08] Carrie Richardson: With me today is Dustin Bolander, who is the founder of both Clear Guidance and Beltex. Dustin, how are you doing today? 

[00:00:15] Dustin Bolander: Pretty good. Thanks for having me on. 

[00:00:17] Carrie Richardson: It's a pleasure. I'm glad we had a little bit of time to talk before we recorded today. I think that everybody's going to find this really interesting.

[00:00:24] Carrie Richardson: Not very many people wake up one day and say, I think I'm going to start an insurance company. 

 [00:00:28] Journey of Starting and Running Managed Services Businesses

[00:00:28] Carrie Richardson: So let's start with a little bit of your background. Tell me about Clear Guidance and how you became a managed services business owner. 

[00:00:37] Dustin Bolander: Sure. So I actually started off managed services back in 2007. At another MSP, we bought out the founder I ended up selling out of that and was like, all right I'm done.

[00:00:49] Dustin Bolander: I did my managed services. I had my MSP adventure and that lasted about six months. Actually I had some carve outs around it. Some stuff fell on my lap. 

[00:00:57] The Birth of Clear Guidance and Beltex

[00:00:57] Dustin Bolander: And so in 2019 Clear [00:01:00] Guidance got started around law firms. So 70, 80 percent of our clients are law firms at Clear Guidance. 

[00:01:06] Challenges in Cybersecurity Insurance

[00:01:06] Dustin Bolander: And then that long, crazy road to getting into insurance was.

[00:01:10] Dustin Bolander: As it became more and more of a requirement. I'm sitting here filling out these forms. I'm trying to explain cyber security to these agents to these carriers and a lot of them didn't understand it. It's oh, do you have this? And I'm like yeah, but we have these compensating controls.

[00:01:25] Dustin Bolander: And, we have EDR. They're like what's EDR? And just more and more going on. And so finally About two years ago, I threw my hands up and it was those. I'm going to get licensed. I'm going to learn this stuff. I'm having to do 99 percent of the work, so I might as well get that last 1 percent also, which led to the end of last year that we were able to set up Beltex, we have our own policy now, which is really cool because all that stuff that I sat there saying carry this is done.

[00:01:50] Dustin Bolander: That should be done this way. We actually have a control over a lot of those things. As far as issuing an insurance policy, 

[00:01:57] Carrie Richardson: pretty amazing. Most people just sit around and [00:02:00] complain about it and fill out the paperwork. And you decided to go full circle and just invent a whole new category of insurance.

[00:02:06] Carrie Richardson: Alright, so you started Two managed services firms and then an insurance company.

[00:02:12] Dustin's Educational Background and Early Career

[00:02:12] Carrie Richardson: What was your educational background? 

[00:02:15] Dustin Bolander: Whatever you want to call insert the cheesy phrase, the school of hard knocks, that kind of thing. I actually started off, we had a family business growing up doing dog training of all things. So that's whenever people are like, Oh yeah, what was your career started?

[00:02:26] Dustin Bolander: And I'm so I was a dog trainer, but I was doing it for our family business. And then whenever I went to college to help pay for school, I got a night job working help desk at a hospital. Then up until I was about probably 32, I said, I'm not gonna be even owning an MSP. I was like, I'm not gonna be an IT guy my whole life.

[00:02:42] Dustin Bolander: And at that point you just accept the reality of it. And I was like, I own an MSP. I think I'm an IT guy, but so yeah, I got into that. I mentioned on the first one we actually bought out the founder, me and two other guys. 

[00:02:53] Transition from Generalist to Specialist in Managed Services

[00:02:53] Dustin Bolander: And so that was interesting because it was going from break fix. 

[00:02:56] Dustin Bolander: We were just the classic how many hours can we work? How many hours can we bill?[00:03:00] Did the transition into managed services like I mentioned over sold out. And then with the 1st MSP, we were really generalist. It was, oh, you need it. Great. I'll sell your firewall. I'll do this on the other. And I talked to a lot of folks that said, riches and niches.

[00:03:14] Dustin Bolander: It's just easier all around. So the second time, I had a lot of good opportunities with law firms, so we just went all in on that and it's the vast majority of our clients are, just midsize law firms. 

[00:03:25] The Growth and Success of the Second Managed IT Firm

[00:03:25] Carrie Richardson: You're still running the managed services company today? 

[00:03:27] Dustin Bolander: I am. We have a pretty good size team.

[00:03:29] Dustin Bolander: There's 29 folks total, so I'm not in it. The trenches as much day to day, but yeah, I split my time 50 50. 

[00:03:36] Carrie Richardson: Okay, so when you started your second managed IT firm, you had a little bit of a war chest from the sale of the first MSP, or did you have to just start over? 

[00:03:46] Dustin Bolander: A little bit of both. I didn't take a paycheck at all the first year, which made it easier.

[00:03:51] Dustin Bolander: The other thing is for starting an MSP the second time is a total cheat code. If you play video games, there's a thing called new game plus where you get to restart again, [00:04:00] but with a bunch of your items and stuff like that, it's that same kind of concept. I made so many mistakes on the first one.

[00:04:05] Dustin Bolander: I did layoffs twice because of cashflow issues, this, that, and the other. It wasn't, there was some good lessons that I learned, but it's one of those things you always learn, the best from pain kind of deal. Is I learned so many bad lessons on the first one that I skipped over a bunch of mistakes that I think first time owners have.

[00:04:20] Dustin Bolander: So we skyrocketed pretty quick on it. So yeah, I didn't take a paycheck for most of the first year living off my sale from the previous MSP, but it was, we were profitable from almost day one even taking that into account. 

[00:04:33] Carrie Richardson: You just made a lot of enemies. I'm sure on our podcast today.

[00:04:38] Lessons Learned from the First Business

[00:04:38] Carrie Richardson: What is, what's the biggest side by side comparison mistakes you made in the first company? Things you did differently in the second, what was the biggest game changer for you? 

[00:04:49] Dustin Bolander: Going all in on your stack. So the first time it was like, all right, Carrie, we need to replace your firewall.

[00:04:55] Dustin Bolander: We're doing Sonic wall this week. Hey, we got this cool new EDR thing. I want to do [00:05:00] it at Clear Guidance. It's here's the seat price. It goes up this much every year and we just keep rolling everything on. There's no a la carte. And so it's awesome from the helpdesk perspective because literally every single client you walk into looks the same.

[00:05:12] Dustin Bolander: They all have Huntress, they all have a Fortinet firewall, so on and so forth. It just makes the support side of it way easier. You don't have to have that rockstar engineer that knows eight different kinds of firewalls and then, oh, this client has this weird setup. So one extreme to the other, but just that standardizing on the stack and pushing it out.

[00:05:29] Dustin Bolander: That was the other thing is a lot of people like, oh yeah, that we have Huntress as our EDR. Do you have it on every client, right? Whenever you go to work a security incident, do they have this or not? The full stack standard stack, but then also pushed out to everybody. 

[00:05:41] Carrie Richardson: So big difference between having to be a jack of all trades in a generalist to being a specialist and hey, this is what we sell: buy it, don't buy it. 

[00:05:50] Dustin Bolander: Yeah, exactly. Here's the package. You're taking the Gary Pica. Here's the cake kind of thing, right? It's one package. That's it. It includes everything

[00:05:59] Carrie Richardson: spent a [00:06:00] week with Gary Pica and the true methods. True peer groups. I have heard a lot about that so I could see how that would be very helpful.

[00:06:08] Dustin Bolander: The one other piece that was interesting and you made the joke about a lot of enemies earlier, is I get a lot of flack for saying this, but our first year, we also did end up taking on opportunistically a lot of hourly work that would come in to where we knew we could rip through it. Not ongoing, but a, hey, can you guys come in and install these firewalls?

[00:06:25] Dustin Bolander: This kind of stuff that project work. And that was around just juicing cash flow, right? So at that point, okay, we know we're about to make another hire. Let's take on these two or three projects so we can make that hire now. So if you go back and look at year one, a lot of people will be like, that's a really bad mix of revenue.

[00:06:40] Dustin Bolander: But we were intentionally doing it knowing we weren't going to keep it long term. But it was just, oh, cool. We can do, here's a quick 30K that covers a new hire salary for three months. Yes, absolutely. We'll grab it real quick. Which is against that general advice that you see in the MSP industry.

[00:06:54] Carrie Richardson: 

[00:06:54] Carrie Richardson: You, have some, basis for comparison from financial [00:07:00] education, business one, business two, like the things that I took risks on in my first business, I would absolutely not do today. I would not put sponsoring it nation on my visa and just hope that it all worked out, so we all live and learn. So you're going along, you're your managed services company is 29 people. You're doing great. 

[00:07:21] The Decision to Start an Insurance Company

[00:07:21] Carrie Richardson: And you wake up one day and say, gee, my life isn't complicated enough.

[00:07:25] Transition into the Insurance Industry and Challenges Faced

[00:07:25] Carrie Richardson: I think I'm going to start an insurance company. Is that kind of how it went down? 

[00:07:28] Dustin Bolander: Basically I'm not good at having downtime at all. I got three kids, a bunch of broken down cars I like working on. So it's one or the other start a new business, buy a new project car. My wife likes the business side of it better because our driveway is full, 

[00:07:41] Dustin Bolander: But yeah it was one of those, it just got frustrating. We're doing all the work. We understand this better than the person selling the product almost every time, it's a young industry.

[00:07:50] Dustin Bolander: I think the first cyber policy came out in the late 2000s. Relatively speaking, it's still upstart. It's still changing on a monthly on an annual basis. So it was a little [00:08:00] bit of frustration. My friend Kelvin, who created SIP he used the term spike driven development, right? He created that out of just there's nothing else out there that does a good job on it.

[00:08:10] Dustin Bolander: I think that was a little bit on this side of it, too, was it's a good opportunity, but also just the frustration of I'm just going to do it myself. Got us to where we're at today. 

[00:08:19] Challenges in the Cyber Insurance Industry

[00:08:19] Carrie Richardson: So what were the problems that you identified when you were trying to help your clients secure cyber insurance policies?

[00:08:27] Dustin Bolander: Yeah, so couple different pieces from just the pure cyber security side of it was insurance is perpetually 12, 18 months behind actual cyber security, so we'll be talking. I'm not going to go super in depth geek out on it, we had like for the people that know what log for J was that was, November 2022 at this point.

[00:08:48] Dustin Bolander: I just had somebody in insurance the other day was like, Hey, have you heard of this log for J thing? And I'm like, yeah, that happened like a long while ago, ancient history and cyber security times. 

[00:08:57] Carrie Richardson: So for those of us who aren't technical, what does that [00:09:00] mean? 

[00:09:00] Dustin Bolander: It was a security vulnerability that was like everything on the internet was affected.

[00:09:04] Dustin Bolander: So that was the if you think in insurances, they talk about catastrophic events. So they could have one of a giant hurricane hitting Florida. Log for J was the closest thing that's happened in cyber so far to a giant hurricane. So it was a bad scary. Nobody knew where it was too.

[00:09:19] Dustin Bolander: Because it was like a Lego block in the thing. Just that it was a huge headache across the board in every way, shape and form. So that was a big turning point for the end for the insurance industry, because they hadn't dealt with that before, but there's still literally to this day to last week.

[00:09:33] Dustin Bolander: Of trying to understand all that. And then on the cyber security side, you have the people that are in the trenches doing. It's all them have moved on, right? We're tackling the next challenge. That kind of thing. So just that insurance moves slow, which makes sense. Historically, like hurricanes fire haven't changed that much.

[00:09:49] Dustin Bolander: So they don't have to move fast. You look back at 100 years of data. You can't do that in cyber. So it's just so different. So that was one of one of the pieces. And then the other one is an MSP. They don't trust us [00:10:00] a lot in the insurance industry. That was the biggest thing. It's second guessing what we're doing.

[00:10:04] Dustin Bolander: The tools that we use aren't ever on the applications. It's these, AT& T, AlienVault managed service or managed security service. No, no MSP uses that. Why is it on the form? You're sending this out to SMBs. Nobody's using it, right? Our, billion dollar customers with the policy use it.

[00:10:20] Dustin Bolander: There's a difference between enterprise and SMB. So that part has gotten, I don't want to say fixed, but it's a lot better than it was a couple of years ago. Insurance has finally realized that SMB is not enterprise, right? That it's completely different. Everything about it. Like we were talking finances earlier, like everything about it's completely different, including cybersecurity.

[00:10:38] Dustin Bolander: So that's a little bit better. But still not great. And then the final piece was a lot of insurance is competing with MSPs, so that's become like a running joke of, oh, this isn't a safe thing. But by the way, we sell the same thing over here. You can buy it from us if you want to. So it's becomes a on the MSP side.

[00:10:55] Dustin Bolander: You almost got to be on defense whenever your clients are going through the insurance renewals [00:11:00] because the insurance guy is selling a lot of competing services and saying, Oh, with your policy, you should buy X, Y and Z. Which just let insurance be insurance, right? I don't go and do, whenever I get my homeowner's insurance, they don't send a repair person out with it.

[00:11:12] Dustin Bolander: They're not selling me home warranties with it. Not usually at least. And cyber insurance Not yet. Talk about that. Yeah, not yet. So that was the three big pain points, right? That the slowness of it, not understanding SMB and then that competitive, competition side of it too. 

[00:11:29] The Role of MSPs in Cyber Insurance Claims

[00:11:29] Carrie Richardson: Now, there was one thing that you mentioned when we were prepping for the podcast about the insurance companies not allowing the MSP to remediate the issues.

[00:11:39] Carrie Richardson: So if there was a challenge there at you couldn't be compensated for fixing the problem afterwards.

[00:11:46] Dustin Bolander: So I'm glad you brought that up, because that's actually probably the most important part of what we did. So there's four things we did. So on that side of it, if we look at, say there's a ransomware attack, right?

[00:11:56] Dustin Bolander: Part of it is OK, you got to restore from backups. [00:12:00] There's nobody better equipped that can do it better and faster than the MSP who's been managing those backups. In most cases there's, I'm not going to go into, there's the bad MSPs out there, the, that part of it, but for the most part, your average MSP, they know the backups, they already have access to it.

[00:12:15] Dustin Bolander: So why is insurance not taking advantage of that? And the cool thing is, it's very rare that you get to say win, win, On the insurance side, what we want to do is keep our claims cost down that we go, okay, Carrie has this big breach. We're going to spend 800, 000 on the insurance side. We pay everything out.

[00:12:31] Dustin Bolander: I'd rather that be 600 or rather 80, 000 even better. But, the lower we can get that. So bringing in the MSP. Is there familiar already? They can work faster, which means we're saving money. It's awesome. So that was really baffling to me why insurance was always like, Oh, no, we're not doing it.

[00:12:47] Dustin Bolander: But instead, we're going to bring in, this team of almost fresh college graduates that are building 300 a year because the incident response companies can't hire fast enough. Guys, come on, this doesn't make sense. So whenever we were setting up Beltex you Our [00:13:00] partner carrier whenever we pitch that it was an interesting meeting because they just sat back and you could see the wheels turning and then the lady who's the head attorney just like goes like this because I don't know why nobody else has done this yet.

[00:13:09] Dustin Bolander: This makes perfect sense. So yeah, the MSP can actually they have a playbook up front so they know what they can and can't do. And then on the actual other side of it, as we get into it, the insurance company will leverage the MSP to do certain tasks. Again, faster, cheaper, better for everybody. 

[00:13:26] Carrie Richardson: So I'm sure there's lots of people listening today who are not technical, who are entrepreneurs with small businesses that use MSPs.

[00:13:35] Carrie Richardson: Walk us through what happens when you have to make a cyber insurance claim now. 

[00:13:41] Dustin Bolander: Yeah, so today for, the vast majority of it, I'm going to simplify it a little bit. But so something happens, the general expectation from insurances, don't touch anything. So that's the first problem. It's there's some certain things that you can do in some cases to be, slowing down, containing it.

[00:13:56] Dustin Bolander: Isolating the network, things like that, but there's been so many [00:14:00] mistakes. I understand where insurance is coming from there. So many people do what we just restored from backups. Oops. The attacker was still in the back. It's still in the network at that point. Whenever we restored from a week ago, but don't touch anything, pick up the phone and call or in a lot of cases, send an email to claims.

[00:14:14] Dustin Bolander: Hey, here's my policy number. We just had a ransomware attack. So at that point, insurance is going to bring in a breach attorney, so it's a lawyer that, and the lawyer is going to be working for you as the insurance, the policyholder, and then that in breach attorney is going to bring in the forensics people, the incident response, the whole nine yards, whatever needs to be done.

[00:14:33] Dustin Bolander: So they're both the, your legal counsel and your project manager in most cases. Then the incident response people come in, they look at your network, they say, okay, here's what happened, here's what we're going to do, and then past that, you may have more stuff say, you have medical records, you're probably going to owe some money to the state that you're based in Texas, I think it's 250 per medical record that gets, per consumer record that gets breached stuff like that that's the interesting part, insurance will cover that, [00:15:00] so a lot of people think it's just looking at the technical part of it, recovery it'll cover the regulatory fines, but If you have good insurance, which we do it'll cover business interruption too.

[00:15:09] Dustin Bolander: So the easiest sell on that is if you're talking to a law firm where they do billable hours. Okay, guys, you're going to be down for a week. How many lost billable hours is that the business interruption will cover that as well. A restaurant, here's what we would normally make every day. Business interruption would say, Oh, cool.

[00:15:24] Dustin Bolander: You're normally bringing in 2, 000 a day. You're down for a week. Here's a 14, 000 check. So it's not just the technical part. It's the other. The we're talking earlier the other parts of the business, right? That are impacted by that outage helps cover that. 

[00:15:38] Understanding Beltex and Cyber Insurance Policies[00:15:38] Understanding Beltex and its Cyber Insurance Policy

[00:15:38] Carrie Richardson: So tell me about Beltex and the difference between that cyber insurance policy and what's been commonly available to date.

[00:15:47] The Importance of Security Measures in Cyber Insurance

[00:15:47] Dustin Bolander: Yeah, so the two big pieces that we have are on the application side. Is were built around the controls themselves. So the concepts, the technology is not around specific products. [00:16:00] And so the reason I say that is you'll sometimes have which of the following do you use for protecting your email?

[00:16:04] Dustin Bolander: Here's 6 things on this drop down. Ours is just do you have multi factor on everything? We don't care what you're using. It's just, is it protected? Do you have one of the big ones that we require? Which I don't know any other carrier that requires it for every single insured, but do you have 24 by 7 EDR is endpoint detection response, but it's basically a thing on every single computer and then there's a team that's watching it.

[00:16:28] Dustin Bolander: But since it's 24 by 7, because if you think about it, the hackers don't go home at 6 o'clock, right? It's gonna be in the middle of the night. It's gonna be on Thanksgiving weekend is 1 of the worst ones for in the U. S. Because they know that we're all just sitting around getting fat on turkey. So things like that, right?

[00:16:43] Dustin Bolander: So it's not, oh, do you use this team, right? Do you have, carry security force watching you? It's do you just have a security team? So we've left it very open ended from that standpoint. It's do you have the right boxes checked? Not are you using these products that we like. And then on the other side of it, whenever that claim comes [00:17:00] around, which statistically a lot of companies are getting breached.

[00:17:02] Dustin Bolander: So you're probably gonna have it. We got a playbook on the front end. Hey, MSP, here's what you can start off doing. Here's what's safe. Here's what doesn't destroy evidence. So the forensics people can come in and do what they need to. And then on the other side of it, the insurance, the the claims team, Is going to have the MSP sitting on all the calls, and they're going to come to the MSP on certain things and say, Hey, guys, we just validated that, we need to restore from backup from a week ago.

[00:17:26] Dustin Bolander: Can you please go make that happen? And then the MSP can get paid by insurance for that. 

[00:17:31] Carrie Richardson: So we discussed earlier that, starting a telemarketing company for me, all I needed was a phone and a computer and starting an MSP, it was pretty much an internet connection phone and a computer.

[00:17:42] The Challenges of Starting an Insurance Company[00:17:42] The Journey of Starting an Insurance Company

[00:17:42] Carrie Richardson: What does it take to start an insurance company? 

[00:17:45] Dustin Bolander: So that was a fun, fun learning experience after doing the two companies, I was like, all right it's starting a business. How hard can it be? So I dove in feet first which I don't want to say bad idea. I survived, but it was rough. It is a [00:18:00] lot of paperwork.

[00:18:01] Dustin Bolander: It is a lot of state filings. Getting into the business nerd side of it a little bit. Is we have to have a entity filing in every single state, all 50, so it's not just go get the license but we have to, we're on file with the Secretary of State and then also with the Department of Insurance, so fun thing is insurance is regulated entirely on the state level.

[00:18:22] Dustin Bolander: So there is no federal anything is you just go get your typical tax ID but every single individual state we have to go and file Florida was one of the ones that was more frustrating. Amazingly. I got New York done before I got Florida done, which blew my mind. That's, whenever you talk in general business, people like New York's hard to do business.

[00:18:39] Dustin Bolander: I ended up just flying out to Florida finally because I had to get fingerprinted. So yeah, it was a lot, but yeah, so it was the filing. Myself and one of my business partners she's really good at compliance paperwork, that kind of stuff. We spent probably two weeks straight of just doing nothing but state filings, looking up the regulations, this, that, and the other.

[00:18:59] Dustin Bolander: [00:19:00] docusign back and forth non stop? 

[00:19:02] Dustin Bolander: But yeah, that was the biggest biggest piece of it. And it ended up being, I think it was 35, 000 in just fees between all 50 States to get properly licensed and filed and everything not counting, the other work we had to do going leading up to that, but just to have Beltex registered to where we could sell insurance in that state.

[00:19:21] Dustin Bolander: And we still have California and Georgia. We're still waiting on the final sign off from both of those. So that took us we started in September. And we did not have the vast majority of it done until probably late December. If you think government moves slow the Department of Insurance moves even slower.

[00:19:36] Carrie Richardson: I'm assuming that there has to be a certification, some education that somebody has to hold to even apply for these things. So yeah, whose job was that 

[00:19:48] Dustin Bolander: I'm one of those. I'm just going to do it myself to get started if you haven't caught on. So I will not be that person going forward. We have somebody else for that.

[00:19:55] Dustin Bolander: But yeah, I actually went out and got my Texas insurance license. [00:20:00] It's surprisingly excuse me. It's surprisingly easy if you're good at standardized test taking and memorizing, which I skated through school just by virtue of that. I was one of those. Don't do any of your homework. And then I could go in and just, kill it on the standardized test.

[00:20:15] Dustin Bolander: So it wasn't that hard for me, but it ended up being on the Texas one. At least cyber was mentioned one time and it was the wrong answer. So it was not super practical knowledge. It's great. I know in general how insurance works and my wife had a car accident and that really helped negotiating with Geico.

[00:20:33] Dustin Bolander: But from the cyber insurance perspective, like it's. Knowing the seven forms of homeowners insurance isn't really useful for me. So that was the biggest struggle was just it was boring. But yeah, so got my Texas license. And then at that point, though, it is just a lot of paperwork. The actual regulations.

[00:20:52] Dustin Bolander: Around it, you have to be aware of, but the file and getting everything set up is just sitting there filling stuff out. 

[00:20:58] The Ease of Use and Accessibility of Beltex

[00:20:58] Carrie Richardson: The major difference is ease [00:21:00] of use, would you say, for between Beltex and a different insurance carrier for cybersecurity policies? 

[00:21:07] Dustin Bolander: Our form is a lot simpler and more concise. There's a lot of, I could go through a long list of industry folks to say thanks that have given me feedback on it.

[00:21:15] Dustin Bolander: Bob Miller and Wes Spencer were two big ones on that. As we just went through is clarity, transparency. And then another piece. So if you can't tell, we're nailing down the marketing message on it. Still, you keep making me think of stuff, but it's also available. You can go 100 percent online to get it, which is very rare for cyber insurance right now.

[00:21:33] Dustin Bolander: I think we're the only active one that you can do that, but it's buying car insurance. If you're buying something simple, like cool. I got two cars. Me and my wife. I need to get them insured. I'm just going to go online. I'm not going to call up an insurance agent and run through it. If you're a bigger company, say you got 300 employees, Beltex isn't for you, right? You should probably be talking to an insurance agent, but if I'm a 30 person retail store I don't need to go through this whole song and dance. I can go in. I can fill my stuff out. I [00:22:00] get the policy, you e sign, pay and go. Again, just that trying to remove all the different obstacles, the headaches, stuff like that.

[00:22:07] Dustin Bolander: Yeah, ease of use was one of the cornerstones whenever we were putting this together. 

[00:22:11] The Role of MSPs in Cyber Insurance

[00:22:11] Carrie Richardson: And this is something that a consumer or what we would call it an end user in our ecosystem could fill out or the MSP can bring it to their attention and say, Hey, this is the thing you're going to need. 

[00:22:26] Dustin Bolander: Yeah. Cause what we're seeing a lot of times with driving, like your typical Beltex customer is going to be a end user, like a small business that is new to insurance.

[00:22:36] Dustin Bolander: So something came up where they need it. We've had for example, a car car dealerships and repair shops to be licensed for certain companies have to get a cyber policy like it's a mechanic. That's right. I got Joe's repair shop. Joe doesn't care about cyber insurance. He's I just need to get something right.

[00:22:51] Dustin Bolander: I need quick and easy. I don't want to sit down and talk to it. So his MSP is like, cool. We got this bell text thing. This is this new requirement that you need. Just go here, fill it out real [00:23:00] quick. Version 2 is going to be coming out shortly. We're going to have an MSP form where they can pre fill it for their customer.

[00:23:07] Dustin Bolander: So that way again, it's you don't even have to sit there with your customer pre fill it out. They get the link and all the security stuff is already marked out on it. And then Joe's able to go grab that policy, 

[00:23:16] Dustin Bolander: and so at that point, they're telling us their revenue. There's a couple of questions around whenever they do like wire transfers and stuff like that, but it's on the shorter side for a cyber insurance form. And the goal is that you don't have to have a translator sit in there. That's been 1 of the other big complaints.

[00:23:31] Dustin Bolander: They're saying this what does this even mean? The cyber security guys are sitting there reading it saying this isn't. You can't answer this question. So we've tried to make everything just as black and white as we can for both the insured the end customer, right? And the MSP as they're filling it up.

[00:23:47] The Future of Cybersecurity Insurance[00:23:47] Future of Cybersecurity Insurance and Beltex's Competitive Edge

[00:23:47] Carrie Richardson: From an opportunity perspective, where do you see the industry going? I know everybody has errors and omissions insurance now. And all kinds of other I just noticed in my homeowner's policy, they do not [00:24:00] cover insurrection. So policies are changing, things are changing. What's going to change in cybersecurity insurance that Beltex is going to have to keep on top of?

[00:24:10] Dustin Bolander: One of the big pieces that's going around as they had the war exclusions before, which was, you're not covered. Okay. If a Russian hacker hits my network, and this has been in the news, this is the hot button thing. Everybody talks about was there's some big case because they said it was the Russian government attacked this company and they declined their coverage, this, that and the other.

[00:24:30] Dustin Bolander: So that's, okay. Not really clear yet, but it's getting hashed out slowly, but the next one that's coming up is a catastrophic event. So I use the example earlier of, like the big hurricane hitting Florida. So imagine there's so many companies that are running on Office 365, right? So Office 365 goes down for a couple days.

[00:24:50] Dustin Bolander: You're technically your insurance covers it, but if I have, a thousand policies at Beltex that are on there, that's a huge payout. I don't know that a lot of insurance companies will be [00:25:00] able to fully survive that. So you're starting to see stuff come out where it's okay, these systemic events may or may not be covered.

[00:25:06] Dustin Bolander: And then it's insurance. So the way that insurance deals with everything an umbrella policy is we're going to put more insurance out there. So now you have what do they call them? Catastrophic cyber bonds, so it's only for these huge. I know it's ridiculous, but that's the next piece that's coming out is a funny timing that we're recording this.

[00:25:24] Dustin Bolander: We just had that huge teams outage last week, right? So that kind of stuff coming up. That's going to be the next big piece. I haven't figured it out. I don't think anybody has yet, but the industry is starting to work their way through that because there's going to be that log for J thing ended up not being that horrible from an insurance perspective, but something's going to sooner or later.

[00:25:42] Dustin Bolander: We're going to get that huge hurricane. And so the industry is like, how do we deal with that? The government had talked about doing some kind of cyber insurance backstop. I don't know. I'm not going to sit here and make predictions on that, but that's the big problem. Whenever I'm going to an insurance conference next week.

[00:25:58] Dustin Bolander: Very exciting. That sounds very [00:26:00] exciting. But that's going to be 1 of the big points of discussion was these catastrophic events and how do we cover those? Because if we got, the whole industry is like 6 billion right now if. Let's say 50 percent of those are on Office 365 and it goes down and insurance has to pay out.

[00:26:18] Dustin Bolander: Like it's not going to survive straight up. There's not enough money. Okay, what are we going to build around that? 

[00:26:25] Carrie Richardson: I guess that's a problem for the insurance conference next week, and we're not going to go there. 

[00:26:32] Dustin Bolander: My answer was always if Microsoft is down for a week, we probably all have bigger problems and we're not worried about our insurance claims yet.

[00:26:39] Carrie Richardson: Microsoft goes down for a week. Can we just all go on vacation, Dustin? 

[00:26:43] Dustin Bolander: It sounds amazing. 

[00:26:44] Carrie Richardson: I do find it very fascinating that you went from managed IT to something that requires even more bureaucracy and paperwork.

[00:26:53] Dustin Bolander: Yeah that part has not been as fun. One of the nice things on IT is just like how quick it moves. [00:27:00] And it's been a little while now, so I've gotten used to it. But the insurance is definitely the slowest moving industry. On the IT side, I've worked in a couple other different industries.

[00:27:11] Dustin Bolander: I mentioned earlier, I started off in medical. Insurance moves extremely slow. Both from the regulatory standpoint, but that also just the nature of it, too, that they are so risk adverse. So there is constantly I'll have these conversations with people in the industry and it's we're just going to wait and see.

[00:27:28] Dustin Bolander: And so my nature, and I think you're the same way. It's just there's opportunity here. Guys, we should take advantage of the opportunity. Come on. And it's just pulling teeth. We talked with, I want to say 30 different going back to it's all, there's always more insurance.

[00:27:41] Dustin Bolander: There's also a thing called reinsurance that we buy insurance for our insurance companies. So to get Beltex off the ground, we had to, meet and find reinsurance. We met with 30 something reinsurance companies before we finally found one to work with. And a lot of them were just like the cyber thing.

[00:27:57] Dustin Bolander: It's, pretty new. It's changing really fast. And, we just need to [00:28:00] wait and see what happens. So that that part of it has been, I'm not going to say I'm okay with it. I'm reluctantly used to it at this point, but yeah, it's just, it's a very cautious, slow moving industry. And then even whenever they do go to get started.

[00:28:15] Dustin Bolander: You're looking at months before something ramps up fully and it doesn't matter what it is. It could be your carrier partner themselves or like the software you use to run the insurance. That kind of thing was we had one piece and it was, but they tell us in June, they said it's ready and it was not actually ready until the first week of January, but that's just the timeline.

[00:28:35] Dustin Bolander: It moves on. You get used to at this point. We're not, we're not proposing or announcing or doing anything until it's actually a done deal. Like on the side, you've done partnerships and stuff where it's oh, yeah, we're in motion. We're going to announce this. We know it'll be wrapped in the next 30 days and we can actually start moving on it.

[00:28:51] Dustin Bolander: That doesn't ever happen in insurance. Yeah. 

[00:28:53] Carrie Richardson: Like software development that's supposed to be done in January and it's next January and it's still not ready. 

[00:28:59] Dustin Bolander: [00:29:00] Yeah, picture this low as software developers in the world. 

[00:29:03] The Competitive Pricing of Beltex

[00:29:03] Carrie Richardson: One other thing I wanted to point out that we didn't touch on was the competitive pricing of Beltex compared to some of the other offers out there. 

[00:29:13] Dustin Bolander: Oh yeah, thanks. So yeah, on that side of it, too. We are generally one of, if not the most competitive on the pricing side. So with the SMB side of it, that the smaller businesses go more towards that micro SMB, you're seeing stuff in the news.

[00:29:29] Dustin Bolander: So it's oh, yeah, the average policy is 3000, 10, 000, that kind of thing. If you have a business that's like a million, 2 million a year in revenue we're seeing policies that are around 1, 000 a year based off of if you have good security controls. It's 1 of those things you had asked earlier, as the industry grows, the opportunity and stuff is 1 of the big reasons that I got into the same reason on the MSP side where it's like SMBs are just not secure enough.

[00:29:51] Dustin Bolander: The ones that don't have insurance that haven't even looked at it. Just go out and get some quotes. Go to Bell Tech's maybe ideally, right? But it's not as expensive [00:30:00] as the news makes it sound. There are for the smaller businesses. You're looking at, on the worst case, a couple thousand bucks.

[00:30:07] Dustin Bolander: If it comes in more than that probably means you have just atrocious security. So go turn on MFA, get good backups, go back, try again. But yeah, like I said, we're seeing, we saw one come across the other day that was like 900. So it's, cyber insurance is actually pretty affordable. 

[00:30:22] The Role of MSPs in Cyber Insurance Purchasing

[00:30:22] Carrie Richardson: Something they should talk to their MSP about before they purchase it, or does somebody just go and buy it and then call their MSP and tell them?

[00:30:30] Dustin Bolander: I would always talk to the MSP because that's going to be that's your security advisor. That's your risk advisor is the term that they use an insurance. And so that was, again, part of what got me doing this originally was that most of the insurance brokers don't get cyber. And then also, so insurance is generally paid off of commission.

[00:30:47] Dustin Bolander: Let's look at, I mentioned, I work with a lot of law firms. So you got a say, 10 million dollar a year law firm. You'll have a business general business owners policy. That's gonna be like maybe 5, 000 on the high end a [00:31:00] cyber policy. That's around 000 and then a lawyer's professional liability policy.

[00:31:05] Dustin Bolander: That's gonna be 100, 000. Knowing that these guys work off of commission, where do you think that agent's gonna be spending all their effort? So cyber is just, it's still such a cheap policy compared to other ones that you're only getting the agents that do cyber are really good. There's just not that many of them, right?

[00:31:21] Dustin Bolander: They're usually, hey, I'm working on your professional liability, your property insurance. Oh, let me throw this cyber thing on there. So that's where the MSP became the advisor was. They're the ones that are in there. They're doing the cyber security already. They know they understand it. So I always tell people talk to your MSP first.

[00:31:37] Dustin Bolander: They know this, they know the security controls that are needed. The industry as a whole is pretty educated just on that baseline of cybersecurity that insurance looks for. So make sure, give thumbs up from your MSP before you dive into the insurance side of the conversation. 

[00:31:52] Carrie Richardson: Thanks for joining us today on WIN!