Insurance broker Marsh has launched a cyber-insurance-policyenhancement to deal with losses stemming from a failure of a cloudservice provider.

The New York-based insurance broker, and subsidiary of Marsh& McLennan Co., announced yesterday that it has launchedCloudProtect, which Marsh says acts as an enhancement to aninsured's cyber policy to address a company's reliance on vendorsacross the entire spectrum of operations.

“Cloud computing enables much more efficient computing bycentralizing storage, memory, processing, and bandwidth, but italso can lead to network interruptions and lost income should thecloud go down,” says Robert Parisi, network security and privacypractice leader for Marsh.

He adds, “Marsh's CloudProtect solution helps to mitigate thisrisk by offering additional protections that are not adequatelyaddressed by traditional insurance policies.”

The policy, which can be customized for each client based on itsexposures, provides coverage for business-income loss resultingfrom an interruption in service from a cloud provider.

Aside from covering lost income, Marsh says the policy coverscosts associated with procuring services from a new cloud providerand costs involved in transitioning to the new provider.

Marsh says the need for such coverage is growing. Citing a Ciscosurvey of 1,300 IT executives from 13 countries, Marsh says it isestimated that, by the end of the year, 20 percent of companieswill be using cloud-computing technology to deliver the majority ofthe software applications they use in their businesses.

In an e-mail, Parisi says Marsh is working with leading cyberunderwriters on this program, and limits on policies currently goup to $5 million in capacity in the primary market with limitedadditional capacity in the excess markets.

He adds that the program will not be attractive to largeorganizations until the market for the coverage broadens to provideover $100 million. The program is currently “relevant to small andmid-size companies (under $2 billion in revenue) who rely moreheavily upon cloud vendors and who would suffer a more severeloss—relatively—than a larger company might.”

This article originally appeared on PropertyCasualty360.com, asister site of Credit Union Times.