Cloud Outage Insurance: Everything You Need to Know


Companies shared expenses $61 billion for cloud infrastructure in Q4 2022, with more growth to come. However, businesses are not well protected against losses caused by cloud outages.

“Cloud service providers typically offer service level agreements (SLAs) that outline their commitment to service availability and performance,” AV8 General Partner Amir Kabir told TechCrunch+. However, penalties are often involved in not reaching the agreed service levels, but these occasional cloud outages cover the full loss that the customer may incur.

Case in point: After millions of websites went offline after a massive data center shutdown in France, a small online retailer complained to the press that its cloud provider OVHcloud was only giving her a voucher worth a few months of free hosting. The actual damage is estimated at $2,000

For e-commerce businesses big and small, it’s easy to see how cloud downtime can cost revenue. But cloud outages can have a negative revenue impact on all types of businesses, whether it’s due to lost productivity or due to customers who owe compensation.

The usual risk is insurance against it, but when it comes to cloud disruption, the insurance sector has not yet fully arrived.



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