Virgin Airlines seeks $20M in damages–are you protected?

Here in Australia, we’ve been familiar with the troubles that Virgin Airlines has had over the last few weeks with it’s outsourced IT Infrastructure.  They’ve had literally DAYS of problems with flights having to be cancelled, customer services issues, you name it.  All of this has caused a major loss of face and public support for Virgin.  The finger is being squarely pointed at the outsourced IT company that was hosting and supporting their systems.  News today is that Virgin are seeking $20,000,000 in damages for this major blunder

Ok – so with a move to people doing more in the cloud, and with some companies looking to be cloud providers as well, the question must come… How would YOUR company survive if it was the hosting provider or outsourced IT department in this scenario?  I’m not just talking about how would you go making an insurance claim ok – I’m talking about the entire loss of face that your IT reseller business would have over this.  How would you handle the loss of customer faith in your abilities to do the job?  How would you rebuild relationships with the customer after they’ve taken you to the cleaners?  Are you even aware of the potential for this to happen to YOUR CUSTOMERS?  Sadly – I’d say that most SMB IT Resellers are not adequately covered for things like this.  I’d say that not only would they likely be out of business, that their ability to support the customers that were not affected would be compromised as well.

Think carefully about the services you provide.  This issue that Virgin have suffered is a chance for you to review not only your insurance policies, but also your systems, and practices to ensure that you do not have these issues yourselves.