Do We Need Cloud Liability Insurances?
Attacks, outages or interruptions are part of our daily life in today’s technology world. When it comes to cloud adoption, there are three major sources of risks, security breach, loss of data stored by the cloud service provider, and the loss of business service due to cloud service downtime.
Although some cloud providers offer credit for time lost due to a system outage in their service-level agreements, there is also cloud insurance. Cloud insurance is an approach to risk management, that can help compensate the business that would suffer during a cloud service outage and provide the customer with financial protection in the case of data loss or a security breach. TechTarget describes cloud insurance as “an approach to risk management in which a promise of financial compensation is made for specific potential failures on the part of a cloud computing service provider. The insurance may be included as part of a service level agreement (SLA) with the provider or it may be purchase separately through a third-party insurance company who works with the provider.”
Earlier this year, the MSPAlliance announced the availability of a new Cloud and Managed Services Insurance. The cyber insurance is aimed at service providers who require comprehensive protection. The MSPAlliance program includes limits of liability options, which range from $1,000,000 to $10,000,000 per claim and include deductibles from $2,500 to $10,000 per claim.
Here are 10 reasons to buy a cyber liability insurance:
- Data is one of your most important assets yet it is not covered by standard property insurance policies
- Systems are critical to operating your day to day business but their downtime is not covered by standard business interruption insurance
- Cyber crime is the fastest growing crime in the world, but most attacks are not covered by standard property or crime insurance policies
- Third party data is valuable and you can be held liable if you lose it
- Retailers face severe penalties if they lose credit card data
- Complying with breach notification laws costs time and money
- Your reputation is your number one asset
- Social media usage is at an all-time high and claims are on the rise
- Portable devices increases the risk of a loss or theft
- It’s not just big businesses being targeted by hackers, but lots of small ones too
What do you think? Do you believe cloud computing insurance should be a standard practice for cloud providers?