Zurich helps Cloud-dependent companies

On the heels of releasing a pioneering report with the Atlantic Council that helps businesses prepare for cyber shocks, Zurich North America has introduced new property coverage for cloud-dependent companies that further builds their resilience to destructive events.

As technology products and services are increasingly delivered electronically through the cloud, it is important that companies manage associated risks. By developing a new property coverage enhancement for middle market companies that is not location specific, Zurich now offers holistic insurance coverage for the cyber risks of cloud computing as well as business revenue losses caused by physical perils to data centers hosting the cloud.

“If a company is using the cloud for more than simply archiving data, even a brief downtime can jeopardize its customer relationships, income stream and reputation,” said Jim Charron, technology practice leader for Zurich North America. “Until now, property coverage hadn’t caught up to the risk of physical damage to the cloud. Zurich has closed that gap, enabling businesses to be more resilient.”

Zurich’s creation of the cloud coverage enhancement for the Property Portfolio Protection (P3) policy addresses the unique risks associated with using the cloud. Cloud coverage provides insurance protection in the case of a business interruption or extra expense from the cloud’s operations being suspended or rendered inoperable due to a covered cause of loss such as fire, wind, vandalism, sprinkler leakage, or other physical peril. In 2012, for example, Superstorm Sandy shut down data centers in Manhattan, forcing some popular media outlets to temporarily disable their websites.

“A growing number of companies serve their customers through cloud-based platforms,” Charron said. “It’s important to not only have insurance protection against cyber-attacks like hacking and data breaches, but also be safeguarded against income loss from a business interruption caused by property damage at the cloud facility. A business using cloud computing is more fully protected when it addresses both possibilities.”

Cloud computing is expanding at a rapid pace, becoming a larger part of Information Technology budgets around the world. According to IBM in a recent article published by the Business Insider, approximately 85 percent of the new software being developed today is being built for the cloud.

Zurich, a leading provider of commercial property and casualty insurance in North America, develops solutions to help meet the evolving risks of its customers. Experienced in underwriting nontraditional risks, Zurich creates policies that work together to provide broad cyber protection and address the gray areas found within more traditional coverage.

“Risk managers should be careful not to get caught off-guard with inadequate or outdated insurance,” Charron said. “Cloud computing presents unique insurance challenges, and Zurich works to solve them.”

Building resilience to catastrophes takes a multi-faceted approach. In April, Zurich and the Atlantic Council released recommendations to help protect the integrity and reliability of cyberspace and the bottom line for businesses and governments. The year-long study recognized the growing threats to globally interconnected systems and the need to better protect against cyber hazards. Find the report at http://www.zurich.com/internet/main/SiteCollectionDocuments/insight/risk-nexus-april-2014-en.pdf