From a recent thread:


That being said, it's not a bad idea to backup customer's data prior to deleting their account (including emails, databases), etc. We had a customer terminate their customer for repeated AUP violations, and their customer is in the process of actually suing them for a million bucks (no joke) because all their email data was lost. Had my customer taken the time to backup the email data, they would have saved themselves a bunch of grief.

So I wanted to ask the community 3 questions:

1. Do any of you guys have insurance for data loss? I'm making a distinction between "recovery" companies which often have payouts with their product.

2. Do you see the insurance industry putting a "Web host insurance" product or something similar on the market? There may be one already, just never heard of it.

3. Should hosts even be concerned with insurance for such litigation?

NOTE: I am speaking specifically for this type of damage and so specific insurance for this and not general.

No I dont think so.
I belive each company that deals with data backup and or that is in the hosting industry. Is secured with fine print.

We are not liable for any data loss.


They probally have insurance when the data is stolen ie banks etc

Greg

I think the best rule of thumb would be to make sure your terms of service and acceptable use policy address incidents of loss/integrity of data; inappropriate use of services; and termination of services covering at minimum non-payment, cancellations, and abuse of services.

How you handle your exposure to risk would best be answered by your trusted legal staff.

I do not personally have additional insurance to cover these issues as it is explicitly noted in my terms of service. Taking the time to help past clients with these issues is always an exciting way to show your clients you care when all else failed.

I believe building relationships is built one hurdle at a time - I focus on being the solid ground you seek to land on.

Remember with the post you provided, that's only half the story. I'd like to have more information to review of the ongoing or settled case though.

Although your Terms Of Service should protect you against such lawsuits, it doesn't prevent someone from suing you anyway. Lawsuits are expensive, even if you win. If you have proper insurance (General Liability, Errors & Omissions), your insurance company will cover the costs of fighting the lawsuits for you so that it's not such a burden on you.

The only insurance of this kind i know is.....

Backups to a secure remote location. Why waste money insuring you dont loose money when you get sued then to stop yourself from being sued :)

I think that makes sense :P

When a customer leaves or is terminated the best thing to do is burn a backup to disc in case it really does come to the worst. Fine print should be used for these sorts of things, in addition to limiting the liability of your firm through company registration.