Cloud Computing Insurance Explained

Cloud Computing Insurance Photo by Liber

Cloud computing insurance is an emerging service – many IT professionals are still unsure what exactly it is, and whether their company or clients need it or not. While cloud computing insurance may just be getting started, cloud computing utilization is growing at an astonishing rate. Worldwide spending on cloud computing is expected to reach $42 billion dollars by 2013. At its essence, cloud computing insurance is a cyber liability insurance policy designed especially for business that employ or provide web-based software services.

Do You Need Cloud Computing Insurance?

Not sure if you need cloud computing insurance? First you need to check whether or not you or your clients are utilizing cloud computing services. The answer may not be as simple as you think. A Virtacore Systems survey found that 54% of people using web-based software didn’t realize their information was stored “in the cloud.” Essentially, cloud computing is any service in which data is housed on another company’s servers, instead in-house. Basecamp, Salesforce, Gmail, and Hotmail are all examples of cloud services.

Problems on external servers or with web-based services, including data outages or breaches, can cause interruption to your business, resulting in a loss of revenue. While cloud computing offers significant cost savings over enterprise software, it also puts you at the mercy of the providers and their Service Level Agreements (SLA). These SLA agreements are designed with the providers in mind, and do not to protect the users or their business.

Cloud Computing Insurance for Users

Cloud computing insurance is recommended for any business that stores data on third party servers. Whether it’s email or CRM data, you need to make sure information crucial to your business is protected. It’s highly unlikely you’ll be protected by providers’ Terms of Service in the event of outages or losses. That makes you liable for any business lost due to these difficulties. Cloud computing insurance is a cyber liability policy designed to meet modern business needs. You’re using 21st century tools to offer your clients the best services at the best prices, make sure your tech insurance policies are keeping pace!

Cloud Computing Insurance for Providers

Providers are also seeing the advantage to providing cloud computing insurance. Recent issues with Amazon’s servers created difficulties for many companies, including Foursquare, Hootsuite, Reddit, and other large enterprise clients. Though Amazon offered credits to users, their terms of service deny liability for outages and data loss. Amazon is by no means alone in this practice, but there were rumors after the outage that major clients were considering leaving Amazon due to this SLA. For smaller providers of web-based services looking to gain traction in the market, it’s especially important that they be ahead of the curve in providing cloud computing insurance that protects their users in case of interruptions, breaches, or losses of data. Standard business coverages rarely covers these occurrences – you need a dedicated cyber liability insurance policy to help protect your cloud-based business.

Contact today to get a cloud computing insurance policy that meets your needs!

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