This post was originally published on Info World
It’s important to recognize that compensation usually requires you to file a claim, often within a limited timeframe, and depends on your ability to demonstrate direct impact. Providers will not cover consequential or indirect damage such as lost sales, contractual penalties from your own clients, or damage to your brand. These are your problems, not theirs. Although this is difficult to accept, understanding it up front is better than being caught off guard.
Limits of legal recourse
Could you go further and pursue legal action? The answer is rarely satisfying. The standard cloud contract, designed by swarms of well-paid lawyers, strongly limits the provider’s liability. Most terms of service explicitly exclude responsibility for consequential and indirect losses and cap direct damages at the amount you paid in the previous month. Unless the provider acted in bad faith or with gross negligence—which is very hard to prove—courts tend to uphold these contracts.
Occasionally, if your outage has broader impacts, such as a widely used financial platform that prompts regulatory scrutiny, high-profile cases may occur. But for most companies, the only realistic recourse is through the SLA credit process. Pursuing a lawsuit not only incurs substantial legal costs, but it is rarely
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