Web Hosting Insurance. Is Hosting Business a Real Property?

web-hosting-insurance.pngHow to make sure that your business worths something? By having long list of good customers? “No”! By the numbers written in your tax forms? Not really. In an advanced economy your business is credible enough if there are insurance agents waiting on a queue in front of your office. That means you have a real business! What kind of business is web hosting?

The Talk

Let’s say what did the members of Web Hosting Talk said in thread titled “Web Hosting Insurance – Is There Any – If Not Wouldn’t It Be Cool?”.

“Wouldn’t it be nice to have a service that offered web hosting insurance?”, asked “HastyHost” in Web Hosting Talk forum. “What would such a service include? If you lose your data, they will pay you?”, responds next member BurakUeda.

“But hosting insurance would kill off all these kids running hosting biz. In the end, the reliable hosting businesses would be the ones running still.” adds FreshFroot.

“Just give the over sellers higher premiums”, says US-Johny.

“Some kind of insurance on hosting, even mandatory wouldn’t stop kiddie hosts setting up and will not stop cheapskates wanting the moon, gold plated and on a stick for $0.50 a year. A dodgy provider in a dodgy country isn’t going to care about insurance and there’s no way to stop them from selling space / servers to whoever. It would be impossible to enforce.”, posts AndyMoo.

“I think it’s a good idea. The insurance company might have several roles… To accredit a hosting company, for example, they’d have to make sure that they are legitimately run with the appropriate level of support. Sort of like the BBB. Perhaps also offer the option to new clients to have their files automatically backed up from the host in question (so if the host ever goes under there’s a security blanket for your files).” adds her comment Amy Williams.

“I just don’t see an insurance company paying someone because their computer crashed or because of downtime.”, responds Azizny.


“I’m not sure how this would work elsewhere but in the UK it would be a nightmare. Firstly the company would need to be a registered UK financial services provider for the insurance to become valid. As if that wasn’t enough the company would have to prove tangible value for each item insured, and how do you value content, or data? I like the idea, but I would guess that its unworkable as a practical service.”, writes Thebyp2.

After Thebyp2 explains a possible implementation of the idea in UK LoganNZ post a surprising information (surprising at least for me).

“I will be starting a hosting insurance company within the next 2-3 months. Keep in contact with me if you are willing to partnership. A reasonable amount of funds will be needed for this business project.”, says the WHT member.

Hosting Insurance! Can we do this?

I didn’t call insurance companies on this issue but from what I know something about this business. Any insurance company would consider to cover a web hosting business if it is tangible enough.

Data centers, colocation providers and companies that have any physical assets can ensure them against natural disasters, fire and emergency. They shall have insurance policies because if something happens they might be sued from their customers.

It is much hard however to ensure a shared web hosting company possesses only its servers and probably the racks. I think that some insurance companies can work out something for a web host like this but they will require a certain standards to followed by the hosting company. This will include the way company does back ups, as well as will put requirements for hardware and the business model.

Would you ensure a financially irresponsible business? Would you grant insurance plan to a company which hosts its servers in a data center, vulnerable to natural disasters and didn’t have it’s one insurance policy? There are many questions to be answered and would suggest anyone who wants to find whether they can get their web host insured to contact a reliable Insurance company.

About the Author

Dimitar A.
Dimitar is founder of the global Cloud & Infrastructure Hosting provider HostColor.com & European Cloud IaaS company RAX. He has two Decades-long experience in the web hosting industry and in building and managing Cloud computing infrastructure and IT ecosystems. Dimitar is also political scientist who has published books "The New American State" and "The New Polity". "The New American State" is one of the best current political books. It is focused on the change of the American political process. It offers a perspective on how the fourth industrial revolution, also called the Digital Revolution and Industry 4.0, marks the beginning of an era of deterritorialization.