The cloud technology is still pretty much of a new phenomenon, especially in the business world. There is always something new that you get to hear about its development. As a matter of fact, the first ever reference made to ‘cloud computing’ was during 1996 and its general usage was not until 2006.
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When businesses worldwide started using cloud technology, their IT departments were initially very reluctant in storing sensitive company data on the cloud. This was mainly because the in-house IT team did not have any control over the data stored in the cloud and cyber security was entirely in the hands of the cloud vendor.
However, over a period of time, the IT professionals have made peace with the fact that the cloud vendors have a strong self-interest in protecting their clients’ data. The cloud vendors make huge investments towards the security measures and have digital insurance, thus making sure that they are staying up to date on all the latest security bits and solutions.
In fact, many companies accept that they are unable to match the cloud vendors when it comes to the resources they use in keeping the data safe. However, there are still some lingering concerns. Even though the cloud vendors are doing a spectacular job of securing the data entrusted upon them, the value of that aggregated data has hit the roof and because of this, the cyber-criminals are putting extra efforts and coming up with new methods of breaching the vendors’ security systems.
Due to the new ways of sending and receiving the data, which includes our mobile devices and the Internet of Things, it has exposed us to new vulnerabilities. Such vulnerabilities further create opportunities for astute property and casualty insurers.
As a matter of fact, the extent at which your cloud vendor can be held liable in an event of a data breach is not always clear. Hence, some insurers tend to provide cloud-specific coverage while some others are writing data breach policies that hold the cloud vendors responsible if the notification of a breach does not happen in a timely manner.
However, if you go to see on a larger scale, cloud computing technology gives the insurers a chance of moving from a ‘product-centric’ role with their clients to a much broader role. This new role combines risk management consulting with the development and sale of the needed products and services.
As companies move to cloud technology and start storing their sensitive data in the cloud, insurers should be examining new ways – such as cyber insurance – to protect their new and existing clients in this huge uncharted cloud environment.