Shifting Security Conversations From Compliance To Liability Defense
In a significant evolution of cybersecurity sales strategies, industry leaders are advocating for a fundamental shift in how security solutions are positioned to clients. Rather than focusing primarily on compliance requirements, forward-thinking providers are now framing cybersecurity investments as essential liability defense mechanisms. This approach resonates particularly well in today’s litigious environment where the financial and reputational costs of data breaches often exceed the immediate damage from cyberattacks themselves.
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Bruce McCully, founder and CEO of cybersecurity assessment firm Galactic Advisors, emphasized this strategic pivot during his presentation at the XChange NexGen 2025 conference. “You’re changing the conversation,” McCully stated. “You’re demonstrating the risk. And you’re helping them understand that lawsuits [can be] worse than ransomware. You’re helping them understand that without evidence, they’re vulnerable to lawsuits.”
The Rising Tide of Cybersecurity Litigation
The data supporting this liability-focused approach is compelling. A recent analysis by RSM examined over 10,000 cyber claims from events occurring between 2020 and 2024, revealing that small and midsize enterprises face significant financial exposure. The study found that 98% of claims, totaling $2.4 billion, came from companies with less than $2 billion in annual revenue.
Ransomware and business email compromise represented half of all claims exceeding $1,000 for smaller enterprises. Perhaps more alarming is the scale of individual claims – smaller enterprises experienced 395 claims over $1 million and another 341 claims between $500,000 and $1 million. Business interruption losses sometimes exceeded $90 million for companies with annual revenue below $700 million, demonstrating how cybersecurity liability can threaten business continuity.
The Legal Landscape Intensifies
McCully highlighted an emerging threat beyond the hackers themselves: “We have a problem – it isn’t just the hackers. It’s a new breed of personal injury attorney that follows the hacker. After a breach, you aren’t the victim, you become the defendant.” His estimation that one in five ransomware events results in litigation underscores the critical importance of documented security practices.
This legal vulnerability exists within a broader context of global economic pressures that are forcing organizations to scrutinize all expenditures, including security investments. The liability defense argument provides a compelling business case that transcends traditional security discussions.
Documentation as Legal Protection
Manny Villa, CEO of San Antonio-based solution provider VIA Technology, reinforced the importance of thorough documentation in managing risk. “My biggest fear as [a solution provider] owner is risk management,” Villa told CRN. He emphasized that establishing processes for documenting clients’ security posture and how solution providers meet their obligations has become essential for doing business.
Galactic Advisors addresses this need by providing services that create written information security plans with evidence for auditors, insurers, and lawyers. Their approach includes implementing acceptable use policies with tracked reviews and approvals tied to insurance requirements, creating secure portals for documentation retrieval even when systems are offline, and developing customized incident response plans based on partner playbooks.
Comprehensive Defense Strategy Components
An effective liability defense strategy extends beyond basic security controls. McCully outlined several critical components that solution providers should implement for their clients:
- Assigned security awareness training with completion evidence
- Technical defense training for IT staff
- Documented inventory of critical data assets
- Ongoing visibility into program progress
- Customized incident response plans tailored to specific business needs
These elements represent what industry experts see as essential for navigating the complex market landscape where security failures can have devastating legal consequences.
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Financial Implications and Insurance Considerations
The financial data reveals troubling trends for organizations of all sizes. Payouts for all organization sizes covered approximately 30% of total incident costs, while the five-year payout for smaller enterprises covered 69% of costs, down from 81% last year. Average crisis services for smaller enterprises ranged from $121,000 in 2020 to $144,000 in 2024, with the five-year total cost of crisis services growing 40% year over year.
These rising costs occur alongside significant technology innovations that are transforming how organizations approach security and risk management. The integration of advanced technologies into security frameworks is becoming increasingly important for establishing defensible positions.
Business Benefits Beyond Risk Reduction
Adopting a liability-focused security approach delivers tangible business benefits for solution providers. McCully noted that implementing these comprehensive products and services could result in greater monthly recurring revenue while simultaneously reducing liability for both clients and the providers themselves.
This strategy aligns with broader industry developments where security is increasingly viewed as a business enabler rather than merely a cost center. By positioning security investments as liability protection, solution providers can articulate value in terms that resonate with executive decision-makers and legal teams.
The Future of Security Sales
The liability defense approach represents a maturation of security sales strategies, moving beyond fear-based appeals to focus on concrete business protection. As McCully summarized, “You’re helping them understand the liability, and you’re giving them a solution.”
This evolution comes at a time when organizations are navigating complex technology infrastructure challenges while facing increasing regulatory scrutiny and legal exposure. The ability to demonstrate reasonable security practices through documented evidence is becoming the standard for defending against litigation following security incidents.
For solution providers, this shift represents both a responsibility and an opportunity – to protect clients from potentially devastating legal consequences while building sustainable business models around recurring security services that deliver measurable value beyond mere compliance checking.
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