5 Reasons Insurance Businesses Need to Avoid Free Cloud Products & Services
December 7, 2016
Running a business is expensive nowadays, and you cut corners when and where you can. Often, that means turning to free consumer-class cloud service providers like Dropbox, iCloud, Google Cloud, etc. instead of a paid business-grade cloud service. Unfortunately, that can land your insurance biz in hot water with your customers, industry regulators, the government, and even your own employees.
In the end, you won’t have saved any money, and will most likely have spent far more than a good cloud service provider would have cost to begin with. Here are the top reasons to never trust your business data with a freebie cloud service.
1. Freebie Cloud Service Providers Aren’t Compelled to Report Data Breaches
The data breaches you hear about are bad enough. So, what if we told you that you don’t even hear about most of the ones that happen? Free cloud services get hacked all the time. In fact, newbie hackers tend to cut their little cyber criminal teeth on free cloud environments, working their way up to meatier targets like Home Depot and Target. There are no laws requiring those services to report these data breaches.
You could be leaking your customers’ most sensitive data all over the internet and never even realize it. Some data held by insurance companies, such as social security numbers, are worth two to three times what transient data like bank account numbers are sold for on the Dark Web.
2. Freebie Cloud Services Have Storage Size Limits
Free cloud environments are designed for personal use, perhaps by an individual or a family. Once you max out your data storage, you either won’t be able to buy enough or it will cost more than it would’ve to go with a business-oriented cloud service provider to begin with.
Most people don’t realize the hassle involved in migrating data from one cloud to another. The formatting is usually different, and offloading is a lengthy, tedious, and labor-intensive process. Plus, there’s no guarantee that you’ll even be able to offload all the data from your free cloud service to your business-class cloud vendor’s platform.
3. Many Regulations That Insurance Businesses are Subject to Don’t Allow for Unsecured Data Storage
Insurance is the most heavily regulated industry around. That includes regulations for handling your client’s data, particularly if that data involves healthcare information that is covered by other laws and regulations, such as HIPAA. You could be in violation of one or more laws or industry regulations by using a free cloud storage app that isn’t governed or protected. You can learn more when you download our free cloud report.
4. There are Hidden Costs to Losing Customer Data
If the public service does lose your customer data, you’ve lost much more than some names, addresses, and account numbers. Aside from any fees and fines associated with the improper storage of regulated data, you will also have lost the trust of your customers, which is worth far more than their monthly premiums. Most of the customers you lose following a data breach won’t be back. If they can’t trust you with their social security and bank account numbers, how can they trust you with their homes, cars, and businesses?
5. There are No Customer-Facing Backup & Data Recovery Solutions
Sure, all cloud service providers have backups and disaster recovery for their data, but these are not the same as having those solutions for the customer. If their servers fail, a hacker gets in and corrupts the information, or a natural disaster hits their facilities, there is no plan in place to protect your business or restore your critical data. That means you could have a partial or total loss of your business data with no plan for recovery and no restitution whatsoever.
The good news is, a business-grade cloud service provider is far more affordable than you may think!
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