What is cloud insurance?

Last week, we discussed cloud insurance and MSP Alliance’s new cloud and managed service insurance. In the second half of our 2-part blog post we will discuss what questions to ask and what to look for when considering cloud insurance.

The growing insurance marketplace has led to a variation in forms and coverage being offered by insurance companies. Here are the top 5 things to consider when investing in cloud insurance.

Is Cloud Computing Covered Specifically? In the past, it was rare to see cloud computing coverage in a cyber insurance policy, but now insurance carriers are starting to use the term cloud computing in their forms or even have specific cloud insurance such as the MSP Alliance. If the insurance policy specifically references the cloud, determine whether any special terms and conditions apply. Consider whether there are specific exclusions or coverage limitations specific to cloud-based risks.

Determine Whether Sub-limits and Deductible or Retentions Apply to Cloud Related Risks – Modern insurance policies typically have limits of coverage that apply, capping the total amount of insurance that is available under the policy. Some policies have sub-limits. Policies that contain sub-limits of coverage may result in lower insurance policy limits being available for certain risks or types of claims. For example, an insurance policy may have a total policy limit of $10 million, but a sub-limit of $5 million for cloud-based claims.

Does the Insurance Provide Coverage for Data Loss Outside the Country? Because of the cloud, employees can access corporate data on the go, no matter whether they are at home, office or stationed outside the country. Similarly, data on the cloud can reside anywhere. Though there are provisions to specify the region in which you want your data to reside, you need to be aware that there are still not as many cloud data centers as there are countries in the world. So, there is a chance that your data might be residing in the same continent but not necessarily in your country. To be safe, you should verify whether or not such incidents are covered. If they are not, ask if there are any provisions to insure data even if it does not fall in the jurisdiction of your country.

Will the Insurance Pay for Data Restoration? Every time a cloud outage strikes, you could end up spending more time and more money restoring that lost data. So find out whether a cloud service provider is liable to pay for restoration activity.

Make Sure to Read the “Terms & Conditions.” Companies should look carefully at their contract with their cloud provider to understand what it will and won’t do for them in case of future issues. Make sure to thoroughly analyze the terms and conditions of a cloud service provider. If you don’t, you may end up feeling sorry when you learn that your provider is not liable for any business loss you incurred due to cloud outage or something similar.

Remember, when dealing with any type of contract it’s best to review everything. It may seem tedious, but reading all the tiny fine print could save you time, money and heartache in the long run.

RiverMeadow enables Carriers, Service Providers, Enterprises and SMBs to deliver and consume the incredible benefits of cloud computing with minimal cost and complexity. To learn more about RiverMeadow’s services contact us at support@rivermeadow.com