Cyber Liability Insurance for Hosting Providers and Data Centers
You sell availability, so your first claim is about downtime and what you promised in writing. Cyber Insurance Group has agents dedicated to cyber liability, comparing hosting coverage across 12+ A-rated carriers.
Compare your hosting business across 12+ A-rated carriers in about 4 minutes. Free, no obligation, and no need to know your limits in advance. We are an independent agency, so the recommendation is based on what covers your risk, not on one carrier’s product sheet.
Get My QuoteWhen You Stop, Everyone Downstream Stops
A hosting outage is not one business interrupted. It is every business that built on top of you, interrupted simultaneously.
Availability is the product
Customers do not experience degradation, they experience being offline. The commitment you signed turns that into a measurable financial consequence.
Credits you owe regardless
Service credits accrue whether the cause was an attacker, a vendor or a failed update, and they are generally outside what a cyber policy will reimburse.
Shared blast radius
Hypervisors, management planes and control panels sit above every tenant, so one compromise at that layer is not contained to one customer.
Physical plus logical
You carry an access control, power and cooling exposure that pure software companies simply do not have, and an incident can originate in either domain.
Your Lost Income Is Covered. Your Credits Are Not.
This is the single most important sentence on this page, and it is almost never said plainly during a sales conversation.
What business interruption actually pays
Cyber business interruption is designed to replace income your business lost because of a covered incident, together with the extra expense of getting back up. It is measured on your revenue, not on your customers’.
Why service credits usually fall outside it
A credit is money you agreed in advance to return when you miss an availability target. Most wordings treat that as a contractual obligation you accepted rather than damage the attacker caused, so it sits outside the business interruption calculation. For a provider with aggressive uptime commitments, that can be the largest single number in the whole event and the one the policy does not reach. Ask the carrier directly, in writing, before binding.
And an outage need not involve an attacker
Many wordings only trigger on a security failure. In 2024 a faulty endpoint security update affected what Microsoft estimated at 8.5 million Windows devices with no attacker at any point. If system failure and dependent system failure cover are not inside your wording, that category of outage is uninsured.
The notification duty you inherit
Where customer personal information lives on your infrastructure, breach law generally treats you as the custodian rather than the owner. Ohio’s statute requires a person storing such data on behalf of another to notify that other person expeditiously, and the owner then runs a statutory deadline of its own. Source: Ohio Rev. Code 1349.19.
What each kind of tech company is on the hook for
- Software and SaaS companies: you hold your customers’ data. The first claim is your customer’s customers were exposed through your platform.
- Hosting and data centers: you hold your customers’ uptime. The first claim is service credits you owe contractually, which cyber business interruption does not pay.
- Development agencies: you built the thing that failed. The first claim is a defect claim under technology errors and omissions, not a breach claim.
- Security firms: you gave the opinion that it was secure. The first claim is an errors and omissions claim that you missed what you were hired to find.
Why it changes the policy conversation
Compare wordings on three specific points before comparing price: whether system failure is included, whether dependent business interruption reaches your upstream providers, and how the waiting period is measured. Our data breach response guide walks through the sequence.
Built Around Time, Not Just Data
Income while you are down
Business interruption and extra expense respond to your own lost revenue and the cost of restoring service faster.
Outages that start upstream
Dependent business interruption responds when a transit provider, cloud region or upstream vendor is the point of failure.
Failures with no attacker
System failure cover, where included, responds to non-malicious outages such as a bad update or configuration error.
Customer data on your floor
Breach response and third-party liability respond when personal information held for customers is exposed.
Before You Decide
The objections we actually hear from business owners, answered straight.
Does cyber insurance pay the SLA credits we owe customers?
Usually not, and this is the gap that catches hosting providers hardest. Cyber business interruption is written to replace income your business lost because of the incident. Service credits are money you contractually agreed to give back when availability targets are missed. That is an obligation you accepted in the agreement rather than a loss the attacker caused, and most wordings treat it that way. Ask the question explicitly before you bind.
What is the difference between our exposure and a SaaS company’s?
What you sell. A SaaS platform sells an application and holds its customers’ data, so its first claim is usually about exposed records. A hosting provider sells availability, so its first claim is usually about downtime and the contractual consequences of it. Both can happen at once, but they are priced and underwritten differently.
Do we have to notify customers if their data is breached on our infrastructure?
Yes, and generally fast. State breach laws separate the owner of the data from whoever stores it. Ohio’s version requires a person storing personal information on behalf of another to notify that other person expeditiously, and the owner then has a statutory window to notify residents. Your notice starts their clock, which is why your incident response timeline is a contractual and legal matter rather than an internal one.
Are we responsible for what customers run on our infrastructure?
Rarely for the content itself, frequently for the consequences. A compromised customer environment can be used to attack others from your address space, which creates reputation and abuse-handling problems even where liability does not attach. Where you provide managed services on top of raw capacity, the responsibility question shifts substantially toward you.
Does a hardware failure or a bad update count as a cyber event?
Only if the policy says so. Many wordings require a security failure to trigger business interruption, which leaves non-malicious outages uncovered unless system failure cover is added. The 2024 CrowdStrike event made the distinction concrete: Microsoft estimated a faulty update affected 8.5 million Windows devices with no attacker involved at any point.
What does cyber liability insurance not cover for a hosting provider?
It does not pay service credits, it does not replace hardware, and it does not cover a customer’s own losses beyond what liability cover responds to. It also does not answer a capacity or performance dispute. The policy is built around the incident and the claims that follow it, not around the commitments in your agreements.
What Would Cyber Liability Insurance Cost Your Hosting Business?
Pricing follows the availability you commit to, how many customers sit behind one control plane, your upstream dependencies, and the controls you can evidence. See the breakdown in our cost guide, or get a number for your business.
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