“Guest View: Insurance for the cloud”

When you hear “cloud computing,” is insurance the first thing that you think of?  No?  I’m the only one who thinks that way?  Well, if you were wondering about the implications of cloud computing on insurance and risks, I co-wrote an article with my former colleague, Idan Ivri that addresses those questions.

First, what does “cloud computing” mean?  We explain:

Cloud computing is a loose term, but it generally refers to storing user data or applications on a remote server rather than on users’ own systems. A 2009 industry study by Coda Research Consultancy estimated that, by 2015, various forms of such software could represent 17% of all information technology spending worldwide.

That sounds great, doesn’t it?  The idea is that you and your business don’t have to buy expensive suites of software or massive servers and hard drives to store all of your applications, because you will be able to access them via a third party (sometimes known as a third party application service provider (ASP) or software as a service (SAAS)).

But is cloud computing all silver lining, and no, uh, grey cloud? We note:

[I]f developers make privacy the top priority, cloud-computing developers may face those that say they should be liable for the bad behavior of unsavory customers seeking a dark place to host illegal data or viruses.

On the other hand, privacy standards that are too low could make developers liable for data theft against legitimate users, or for putting private data into the hands of advertisers. Developers will also have to handle disruptions or unavailability of data and services to end users.

Do developers, ASPs and SAAS providers have insurance to cover those risks?  Will “traditional” insurance policies cover?  What about specialized “cyber” policies?  For the rest of the discussion about insurance for cloud computing, click on over to the full article at Software Development Times on the Web.


This blog is for informational purposes only. This may be considered attorney advertising in some states. The opinions on this blog do not necessarily reflect those of the author’s law firm and/or the author’s past and/or present clients. By reading it, no attorney-client relationship is formed. If you want legal advice, please retain an attorney licensed in your jurisdiction. The opinions expressed here belong only the individual contributor(s). © All rights reserved. 2010.
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  • As technology continues to evolve, it is CRITICAL that business owners and heads of nonprofit organizations understand the risks associated with accumulating personal information on their employees, clients and donors, and take action to protect themselves BEFORE a loss occurs.

    Thank you for sharing this information on the latest in coverage for cloud computing!

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