Correction: The retail and wholesale industries stand to lose up to $3.6 billion and manufacturing could lose up to $8.6 billion.
The retail and wholesale industries could see economic losses of up to $3.6 billion in the event of a major cyberattack on U.S. cloud service providers, according to a report from Lloyd's and AIR Worldwide.
Specifically, the report stated that if a cyber incident were to take down one of the country's top three cloud service providers for a period of three to six days, the outage would cause losses of between $1.4 billion and $3.6 billion for the retail and wholesale trade sector.
The report also said smaller businesses would suffer a larger total economic loss than Fortune 1000 because companies too small to achieve that ranking are the ones more likely to use cloud providers to avoid buying and building their own in-house IT infrastructure.
Companies who move their IT operations and applications to the cloud may feel that cloud services are all silver lining, but cloud service providers are susceptible to cybersecurity attacks and other cyber incidents, too.
Retailers are increasingly becoming fans of cloud services and apps, but as another recent study from Netskope pointed out, cloud apps also introduce a new cyber attack landscape for retailers to be concerned about. As retailers look to leverage cloud services, they may want to be doubly sure that their cloud service providers' networks are reliable and well-protected.
A large part of the reason why Lloyd's and AIR are looking at the potential economic effects of a major cloud services outage is also to highlight the insurance gap that exists in relation to these kinds of incidents. While a lot of companies have insurance against natural disasters and a variety of other things, insurance against cyber security attacks and other types of incidents, like unintentional technical glitches, is not as common.
Retail's potential loss of $3.6 billion in such an incident is second only to the manufacturing sector's potential loss of up to $8.6 billion, meaning that retailers adopting cloud services may want to go the extra steps to determine what their cyber risk exposure is. Some cyber risk doesn't mitigate the huge cost and management benefits of using cloud services, but it may be enough to warrant seeking greater protection.