Most MSPs don’t get into business because they love contracts. They get into it to solve problems, keep systems running, and help clients stay productive. Legal language, liability clauses, and indemnification terms tend to live in the “we’ll deal with that later” pile. Until something breaks, and something always breaks.
A missed SLA, a ransomware incident, a vendor outage, or a subcontractor mistake can quickly turn into a finger-pointing exercise. When that happens, it’s not your intentions, reputation, or years of good service that matter most. It’s whatever’s written in black and white in your MSP agreements.
You don’t need a law degree to avoid legal landmines, but you do need to stop treating contracts and liability as afterthoughts.
Far too many MSPs sign vendor agreements, customer SLAs, and subcontractor forms without knowing what’s really in them. That’s a problem. Because when something goes wrong, and it will, the paperwork is what gets enforced.
Here are the top areas to watch:
- Scope creep and lack of clarity: Every client contract should spell out what’s covered, what’s not, and how changes get handled. Open-ended language leads to disputes, and disputes eat time, money, and trust.
- Indemnification clauses: Be cautious with any clause that requires you to “hold harmless” a vendor or client, especially if it lacks limits. If something breaks because of them, you shouldn’t be on the hook.
- Cyber liability insurance gaps: Make sure your own policy covers third-party claims, and confirm your clients have proper coverage too. An uncovered breach can become your financial nightmare.
- Outdated master service agreements (MSAs): If you haven’t updated your MSA in years, it likely doesn’t reflect your current services, or current risks. Get a legal review from someone familiar with MSPs.
- Don’t wing it: A basic legal checkup once a year is a tiny investment compared to what legal trouble can cost. You don’t need daily counsel, you just need a solid foundation and a sharp eye on changes.
Check out the ChannelPro Legal and Liability Answer Center for insights and best practices around the complex legal world that MSPs and their customers live in.
