Parametrix introduces insurance-backed technology performance guarantee
By Henry Gale
Feb 11 - (The Insurer) - MGA Parametrix has launched a product covering technology companies' contractual performance obligations against system interruptions.
The performance guarantee, backed by parametric insurance, triggers payouts automatically in the event of an insured downtime event.
It can be provided either as a service-level agreement (SLA), offering compensation for unmet uptime agreements, or a performance warranty, covering financial losses from service disruptions.
The guarantee can be structured to align with key metrics technology suppliers are contractually obliged to meet, such as minimum uptimes, transaction throughputs or processing times.
Parametrix is providing warranty limits from $2mn to $75mn, backed by insurance underwritten at Lloyd's of London.
The company says it designed the product in response to demand from enterprises looking to improve their clients' confidence in technology systems. Unlike in property, cyber and errors and omissions insurance, claims are paid based on the performance outcome (the nature and length of the interruption) of a disruptive event, rather than the peril.
Digital infrastructure providers are one type of company that could benefit from the product, Parametrix said. These firms may offer SLAs to enterprise clients, with the guarantee providing quick reimbursement in the event of a performance breach.
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