Lloyd’s of London report finds that just 13% of the losses would be insured.
What would it cost if a cyber issue shut down one of the top cloud firms? Anywhere up to $19 billion, according to Lloyd’s of London.
The report, which was co-written with AIR Worldwide, looked into the potential losses that could be incurred should one of the major cloud providers, such as AWS or Microsoft Azure, go down.
The impact of a cloud outage of the top-three providers, where there was no access to the services that clients rely upon, could result in a loss of up to $19bn, if the cloud provider was offline in the US for 3-6 days, with manufacturing being hit to the tune of $8.6bn.
An incident like this would only have insured losses of between $1.1bn and $2.5bn, and up to 12.4 million organisations would be affected.
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Such a cloud outage could effectively cripple millions of businesses, with Fortune 1000 companies carrying 37% of the ground-up losses and 43% of the insured losses. Smaller companies, which have a lower uptake of insurance, could face the brunt of the costs due to them being more “likely to use the cloud in order to avoid building the business infrastructure in-house,” said the report.
“This report’s findings suggest that disruption of a cloud service provider in the US market will significantly impact the manufacturing and retail trade industry, due to their heavy reliance on cloud services, and that Fortune 1000 companies would carry almost half of the insured losses.”
The specific identities of the cloud providers is not mentioned, and it looks at four threat sources as well as more than 30 additional vectors that could lead to a cloud service provider failure.
In February 2017 the world got a glimpse of what it would be like if one of the big cloud giants suffered an outage. The AWS S3 storage system suffered an outage that hit hundreds of websites, such as Slack, Docker, Soundcloud and more.