Anything from a targeted DDoS or cyber extortion attack can result in a service outage that triggers an interruption in an otherwise effective, fast and stable SaaS solution. No matter the cause of the service failure, if clients lose money SaaS companies are required to pay in the form of lost income or lawsuits. However, often the most costly fallout arrives in the form of a damaged reputation, which Microsoft, Adobe, LinkedIn and Yahoo all learned the hard way.
But these high-tech failures only represent a relatively new threat to the traditional failures that have always plagued professional service providers. Ultimately the required solution is a comprehensive custom professional liability (E&O) policy that covers unique and traditional exposures. For example, an accounting SaaS solution would likely be well-served by both a separate accountant’s E&O policy to cover standard accounting errors, as well as tech E&O cover glitches that result in financial loss for a client.