Cloud Computing Is Becoming a Pricy Business Interruption Risk: Hartford Steam Boiler

Cloud computing is shaping up to be a pricy and challenging business interruption risk, according to a new survey from Munich Re/Hartford Steam Boiler.

According to the 2018 HSB survey, 34 percent of businesses that experienced an interruption in cloud service said they lost more than $1 million due to the event. What’s more, about 41 percent of U.S. businesses that use the cloud for data storage said they’ve had service interruption with losses. That’s a big number, considering 74 percent of businesses responding said they use the cloud. Cloud computing technology allows users to store data in services hosted on the internet.

“When you consider that most companies use the cloud, they have a serious exposure to business interruption losses,” Timothy Zeilman, an HSB vice president, said in prepared remarks. “Technology has rewards, but businesses must prepare for risks.”

Here are other result highlights:

• Of the businesses that said they sustained cloud interruptions, 77 percent reported a business interruption that caused “significant” losses.
• 86 percent of companies using the cloud said that at least 20 percent of their IT services were cloud-based. About 44 percent said more than half of their IT services were in the cloud, and 15 percent said more than 75 percent of their IT services were cloud-based.
• Even as businesses gravitate to the cloud, they face continued challenges with data breaches and cyber attacks. About 63 percent said they’ve dealt with computer viruses, up 13 percent from a related HSB survey in 2016. Malware affected 58 percent of respondents, up 5 percent.
• 32 percent of businesses surveyed said they dealt with a ransomware or other cyber extortion attack in the past year. About 43 percent paid the ransom, typically between $1,000 and $5,000.
• 26 percent of the surveyed businesses said they dealt with a data breach. About 34 percent said they spent between $50,000 and $100,000 to respond to each incident, with one-fifth spending more than $100,000.

HSB hired Zogby Analytics to conduct the survey, which involved 403 senior business executives in the United States. Chief executive, financial, information and technology officers all took part. Businesses surveyed ranged from those with less than $5 million in revenue and fewer than 50 employees to companies with over 500 employees and between $200 million and $500 million of revenue.

Source: Hartford Steam Boiler