You're right, of course, that 100% uptime is a dream and a goal, but most likely an impossibility. Insurers are investigating many aspects of cloud. As I spoke to representatives from the world of insurance, it appears they are trying to get their hands around the problems; the opportunities, and the possible solutions. As companies place more data and systems in the hands of partners, there are more risk factors, risk factors that will eventually (insurers believe) lead to lawsuits when/where there is any kind of failure, whether that is technical/natural/or manmade due to breach of contract or unforeseen circumstances. Insurers and brokers are trying to figure out all the permutations but recognize they are not technology firms.
They are not, I don't believe, looking to insure the data itself. They are not involved in DR. Instead, they are looking to insure companies financially for the time they lose. As part of their insurance policies, the insurance companies' clients will have to go through risk assessments (just like health and life insurance clients undergo a physical) to make sure they meet certain requirements.
While I am beyond companies and brands wanting to make sure that they have zero downtime, that is a wild dream. Anything can happen and I think that is what sort of makes the whole industry thrive. But as we all also know that is a curse as well. Yes, I will admit that people and companies had a great amount of luck with the cloud during Hurricane Sandy, but what would have been different if their cloud's servers were hit? They would be back at square one again. So I hate to be the bubble buster here, but it is a long shot dream for both sides sadly.
I know, from speaking to insurance executives, that the industry is realizing that they cannot dictate clients' IT infrastructures. Sure, part of the equation is security. And that's one reason so many organizations opt for inhouse or private cloud for more sensitive areas of their business. Any datacenter is subject to failure, though. Insurers must figure this out because one company will. And as soon as one insurer has a viable model, others will kick themselves that they weren't first to market with a solution to a CFO's problem, a solution BTW that will also encourage further adoption of cloud, I think.
I believe - and I am not an insurer - that these policies complement other policies. Just as you might have an umbrella policy, you may want a cloud insurance policy to cover, among other things, the cost of moving to another provider if your first provider closes its doors; the costs of lost business if your cloud provider self-combusts ... with your data, etc.
Presumably we'll see standard forms of coverage gradually emerge from the industry, but I wonder how long that will take?
I can imagine insurers robustly defending the position that "computer network" doesn't just mean any computer network anywhere which you happen to be using!
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