Cloud Outage Insurance is a Real Thing You Should Probably Have

Posted on Tuesday, Apr 25, 2023 by Ned Bellavance

Featured in this episode of Chaos Lever

Remember how I predicted that cloud outages would become more frequent and no one would really care? I totally did. And I was correct about the first half, but it turns out that some people might care more than I thought. At least about cloud-based services that sit near anything financial or health-care related.

There’s a new company called Parametrix Insurance that is looking to provide financial protection for companies that are impacted by a cloud outage that lasts up to 24-hours, after which typical cyber-insurance tends to kick in. Since most cloud outages are resolved in far less than 24 hours, existing insurance often doesn’t cover the financial cost incurred by a policyholder.

Parametrix has set up their own monitoring system to track outages across the major public clouds, and automatically flags outages that impact their customers. Policyholders are reimbursed within 15 days after an outage occurs, and it seems like the whole thing happens automatically.

These policies aren’t cheap though, starting at $100k a year and going into the tens of millions, so this might not be a good fit for your aunt’s flower shop.

Parametrix is only the first of what I’m sure will be several companies getting into this market segment. If you’re too lazy to architect your application to survive a cloud outage, I guess now you have an easy way out. Slacker.