It might seem unlikely, but you read that title right. The MSPAlliance has worked with insurance broker Lockton Affinity to create ‘Cloud and Managed Services Insurance.' Or, insurance for cloud providers. I'll let you stop and absorb that thought for a moment.
Cloud service providers (whether cheap hosting providers or otherwise) need protection. Why? Stuff happens with the cloud. More specifically, cloud outages happen. When cloud outages happen, people and companies become angry. Some even try to sue cloud providers. That's where Cloud and Managed Services Insurance comes into play.
It's All About Cheap Hosting Risk Management
Essentially, the cloud insurance being offered is a risk management tactic. Cloud providers don't want to be sued for loss of wage should the cloud go down. Backing up a cloud company with insurance means that providers will have some way to pay clients when cloud outages happen.
Liability options range from 1,000,000 to 10,000 and include deductibles too ($2,500 to $10,000 per claim). Sound good? There's a slight catch, though. This insurance policy is only available to MSPAlliance members. But, the good news is that this isn't the only kind of cloud insurance on the market.
Cloudinsure Offers Cloud Insurance Too
Another company called Cloudinsure offers cloud insurance as well. This insurance company is well worth looking into if you need some kind of cloud backup — and, trust me, you do. There are added client benefits to holding an insurance policy as well.
Insurance As A Selling Point
Not only will cloud insurance protect providers, it's also a great way for these providers to attract clients. Think about it: would you rather work with a cloud company that's insured or one that's not? You'll probably pick the one that's insured, so that you can gain some kind of compensation if your site goes down during a cloud outage.
Presently, most cloud providers offer clients “cloud credits” when something goes wrong. But, these credits won't compensate users for wages lost during a cloud outage. Insurance, on the other hand, will. Needless to say, it will be interesting to see whether or not massive cheap hosting providers like Amazon offer go the insurance route. Or, if those companies will just keep offering up (somewhat useless) credits.
Would you prefer a cloud provider that's insured over one that's not? If you are a cloud provider, will you choose cloud insurance? Talk back below!