Cloud service providers

Stop: Ask These Questions Before You Sign a Cloud Computing Contract

May 5, 2017

Your insurance business needs the cloud to stay competitive in today’s market. The cloud is more than just a place to store your data. Your business and the cloud storage provider need to work out an agreement that works for both of you. The provider should adapt to your business model. The tricky part is getting everything you need without spending too much money in the process.

Liability for Downtime

This can create an impasse between the provider and the client. Most cloud providers tout a 99.999% uptime, but they also have in their contract that they are not responsible for anything screwing up if there is downtime. For many providers, this is a non-negotiable argument. Ask a potential cloud service provider what their rules are for interruptions in service. Negotiate terms. Of course, they will try to avoid any additional costs on their end because data loss could be very costly if something goes awry. Remember, this pertains to downtime only. Breaches in security due to negligence still falls in favor of you, the client.


Service level agreements are filled with the obligations of the cloud service provider to the client. They will state commitment times and levels of performance you expect from them. The SLA gives you a lot of room for negotiating. If you need the provider to be accessible 24/7 then make sure the SLA states it. If you require certified professionals to work on specific areas of your network, then write it down. The provider will have a generic SLA already ready for you to sign. Look it over and make sure it meets your needs.

As an insurance company, you have to make sure security of client’s data is a top priority. The provider will have a lot of options that can be tacked on to the SLA, but watch the dollar figures. They can sometimes add up pretty quickly. Decide what you need, and what you want. Those things you need are considered non-negotiable, those things you want are determined by the cost of the service.


Some providers require you to sign up for a certain amount of time before you are able to leave without penalty. Hopefully, you have found a provider that fits your needs for many years to come, but there is still the chance you may want or need, to move. See what the costs are for early withdrawals from the contract. Some of these will be quite large and should be negotiated before the contract is signed.

If you do find yourself stuck with a provider, then consider getting a second provider at the same time. You can transfer all your resources to the new provider, and minimize all services through the original provider, thereby reducing their overall costs.

The Exit

It is important to set the ground rules ahead of time in case of an exit. You may decide your insurance firm needs services not offered by your current provider, but you have found one that does. So, you wish to move. You follow all the criteria for the end service agreement and are ready to make the transfer of your data to the new provider. Will your current provider help with the transfer? What happens to the data stored on their servers? Since many providers may have multiple data centers you want to make sure all data is removed from all data centers.

Cloud service providers do have a sales team to sell you whatever services you want. They are knowledgeable about the products and are more than willing to sell you every service they have. Use this opportunity to find out exactly what services and products they have, but don’t get lured into products you don’t need or want. Get a free assessment, and find how TOSS can help your insurance firm today.

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