Cloud Computing's Little-Known Liability Risk

Some outsourced, third-party functions are overlooked

As cloud computing becomes more common so do the risks involved in outsourcing part of a company's technology environment, reported NU Online News Service on Monday, August 30. With such functions as customer relationship management outsourced and hosted by a third party, the liability for maintaining security on the outsourced data and operations does not go away.

Companies using cloud computing to enable any business processes should be aware of the need to treat the provider the way it treats its other third-party providers, including making sure that Errors and Omission (E&O) insurance is in place both at home and at the provider.

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