5 Legal Considerations When Moving To The Cloud

You're contemplating a switch from traditional hosting to cloud hosting for your business. Although there is a lot to consider, it's typically the right decision. Just as when you decided to start your business, you need to be careful and think things through. The security of your data and that of your customers depends on it!

First of all, you need to ensure you are making the switch to the cloud at the right time for your company, as well as being positive the provider you end up choosing offers an experience well suited to the needs of your company. The most important factor: that the provider's contract meets the regulatory and privacy guidelines and restrictions in your industry.

Does Your Insurance Cover Cloud Computing?

When contemplating cloud hosting, go through the fine print of your insurance policy with a fine-tooth comb. Look for policies that discuss your company's networks and computers. Will a loss due to cloud hosting be covered? Also, look over clauses in the hosting provider's contract. Are there indemnification clauses regarding data breaches or service outages? If the answer is no, you are left with no recourse in the event of data loss. If it's in the provider contract, you at least have some form of protection.

If you don't see it in the provider's contract, ask that clauses regarding security breaches and outages be added. And if it isn't in your insurance policy, it's the perfect time to find a new plan that addresses the needs of the cloud!

What Does The Future Look Like?

Prior to signing on the dotted line, take a look at the vendor itself. Are they viable? What if that vendor merges with another company or outsources, what happens to your company then? Also, is your IT department capable of handling issues relating to cloud computing? How about the rest of your staff? It is imperative you draft guidelines dictating best practices.

Is Your Data Truly Secure?

It doesn't matter how strong your policies and contracts are: data loss and security breaches can still occur. You need to measure the impact a breach will have on your operations, as well as on external vendors or partnerships, by reviewing the security plan spelled out by the service provider. Ensure you own the rights to your data, and find out what happens to your data if you switch providers.

Is Compatibility In Place?

This should be high on your list of considerations! What if your business relies on Windows products, and one day you switch to entirely Apple products, or hand out iPads to your mobile workforce? Will the data be compatible across multiple platforms? This won't be an issue if you don't plan on switching platforms, but since the future (especially in the tech world) is unpredictable, compatibility is key.

Is Your Provider Compliant?

A big consideration: federal regulations. They can put the security of your data in jeopardy. It doesn't matter if the data was removed from the cloud, because copies might still be floating around that can be handed over to authorities. You'd never know! Also, assure the provider is considering your company's and industry's regulatory and legal requirements (HIPAA or SAS70, for example.)

NOTE: The contents of this article are not to be taken as legal advice.