As per recent reports, insurance broker Marsh has launched a Cyber policy enhancement which is designed to provide protection against losses incurred from failure by cloud service providers. The service is an add-on to the company’s cyber policy and is specifically aimed at the client’s dependence on the vendors across the wide range of operations.
“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,” says Robert Parisi, Marsh’s network security and privacy practice leader.
CloudProtect solution works to mitigate the risk by offering protection that are not helps to mitigate this risk by offering additional protections that are not sufficiently covered by traditional Cyber insurance policies, says Parisi.
The best feature of the service is that the policy is customizable. Marsh says the policy covers costs associated with procuring services from a new cloud provider as well as the costs involved in transitioning to the new provider.
Marsh says the need for such coverage is growing. Citing a Cisco survey of 1,300 IT executives from 13 countries, the broker says it is estimated that by the end of the year, 20 percent of companies will be using cloud-computing technology to deliver the majority of the software applications they use in their businesses.
Parisi says Marsh is working with leading Cyber underwriters on this program and that limits on policies currently go up to $5 million in capacity in the primary market, with limited additional capacity in the excess markets.
CloudProtect, he notes, will not be attractive to large organizations until the market for the coverage broadens to provide more than $100 million in loss protection. The program is currently “relevant to small and midsize companies (under $2 billion in revenue), which rely more heavily upon cloud vendors and [so] would suffer a more severe loss—relatively—than a larger company might,” he adds.