Marsh has launched an insurance product 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 because of 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 cyber risk insurers, Marsh’s CloudProtect endorsement is a customized risk transfer product 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.