Re: Managed Firewall Service - Opinions

[Mike Scher <mscher () neohapsis com>]

On Thu, 17 Apr 2003, Duncan Sharp wrote:

 [re: managed service providers that extend their error/negligence
      protection to their clients]

>     I can think of at least two service areas:
>
>         1: Rent-a-guards, where either the guards are bonded or
>             the guard service is insured.
>
>         2: Offsite tape {data,document} storage providers. Where the employees
>             are bonded. Hopefully the company offers insurance as an option.

Actually, many offsite tape storage providers explicitly limit their
liability to the physical value of the tapes.  Not the data content -- the
physical replacement value.  The bonding perhaps protects against the
employee's intentional malfeasance -- I'm not sure.

That said, I completely agree that a provider of any managed service
should be able to form a relationship with an insurance company (which in
turn uses reinsurance to control risks, etc.. . .) and extend that
protection to the client.  In addition, one should expect a liability cap
related to the annual cost of the service.  Pricing may be higher at
providers that do offer such coverage; higher than from organizations that
contractually exempt themselves from liability.

That brings us back to the cost/benefit discussion.  If one considers
coverage for the provider's negligence essential, one should examine the
cost of providing the management internally AND the cost of INSURING
against harm from one's own staff's error.

      -M

-- 
Michael Brian Scher     |     Director, Neohapsis Labs
mscher () neohapsis com    |     General Counsel
Fax: 773-394-8314       |     Vox: 773-394-8310
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