CloudProtect: Insurance for cloud computing risks
To assist companies in managing the risks associated with cloud computing, Marsh announced an insurance solution designed to protect companies against first-party losses stemming from a cloud service provider’s failure.
Improvements in technology and the need for greater efficiency have led to heightened interest in cloud computing – the delivery of information technology services, data storage, and/or software applications using the Internet and central remote servers.
However, companies that adopt a cloud strategy are at risk if their cloud service provider fails to render contracted services due to a cyber attack, insolvency or other event.
Companies purchasing cloud services have little recourse for resulting network interruptions as most cloud provider service agreements offer little in the way of indemnification. Insurers of cyber risk typically only provide minimal sublimits or simply exclude such contingent business interruption risks from their policies.
Developed in conjunction with leading cyber risk insurers, CloudProtect endorsement is a customized risk transfer solution that covers lost revenue and extra expense resulting from the failure of the insured’s cloud service provider.
CloudProtect also provides reimbursement for costs incurred by an insured in the procurement of services from a new cloud provider, including the transition of its software, information, and data.
“Cloud computing enables much more efficient computing by centralizing storage, memory, processing, and bandwidth, but it also can lead to network interruptions and lost income should the cloud go down,” said Robert Parisi, Network Security and Privacy Practice Leader for Marsh. “Marsh’s CloudProtect solution helps to mitigate this risk by offering additional protections that are not adequately addressed by traditional insurance policies.”