The Good Tech Companies - The Hidden Cost of Downtime: A FinOps and Insurance Perspective

Episode Date: January 15, 2026

This story was originally published on HackerNoon at: https://hackernoon.com/the-hidden-cost-of-downtime-a-finops-and-insurance-perspective. Downtime drives cloud spend spikes, engineering drag, customer churn, and people risk. A FinOps and insurance lens reveals the true cost. Check more stories related to cloud at: https://hackernoon.com/c/cloud. You can also check exclusive content about #cloud-spend-variance, #downtime-cost-modeling, #finops-incident-analysis, #incident-window-costing, #sla-credit-exposure, #global-employee-continuity, #engineering-downtime-impact, #good-company, and more. This story was written by: @jonstojanjournalist. Learn more about this writer by checking @jonstojanjournalist's about page, and for more stories, please visit hackernoon.com. Downtime costs extend far beyond lost revenue, combining cloud spend spikes, engineering disruption, customer trust erosion, and contractual fallout. This article breaks downtime into four cost buckets and explains how FinOps data, incident windows, and insurance-backed preparedness—especially for global teams—help CFOs measure impact, reduce variance, and recover faster.

This audio is presented by Hacker Noon, where anyone can learn anything about any technology. The hidden cost of downtime, a fin-ops and insurance perspective, by John Stoy and journalist. The cost of downtime isn't just lost revenue. For most companies, it's a combination of cloud spends spikes, engineering time, customer trust, and contractual fallout, all hitting at once. That's why CFOs increasingly look a toutages through two complementary lenses, business risk preparedness and global employee continuity. Joe Cronin, president of international citizens insurance, notes that resilience is not only an infrastructure conversation, especially for globally distributed companies.

For global teams, resilience isn't just infrastructure, it's people. If key employees are traveling or living abroad, continuity depends on having plans and coverage that reduce friction when something unexpected happens, Cronin said. To quantify downtime beyond rough estimates, finance teams, need cloud economics data that ties incident windows to incremental spend and ownership. The four buckets of downtime cost, downtime is expensive because it creates multiple types of loss at once. A practical way to estimate impact is to break costs into four buckets, customer, engineering, cloud, and commercial. One, customer cost includes churn risk, refunds or credits,

and the support backlog created when users can't complete key actions. Even when revenue eventually recovers, trust erosion and increased support load often linger. Two, engineering cost includes incident response hours, context switching, and roadmap slip. Outages pull teams away from planned work, delay releases, and create long recovery tales of follow-ups, post-mortems, and rework. Three, cloud cost often increases during incidents due to retries, failover, autoscaling, and surges in logging, observability. These mechanisms are valuable. They help restore service, but they can also create noticeable spend variance during the incident window. 4. Commercial cost includes SLA credits, partner escalations, and reputational impact. SLA credits may

show up as discounts on future invoices, but the larger cost is often relationship friction, partners lose confidence, customers question reliability, and leadership attention gets diverted. Finops reality incidents are variance events. Cost spikes during outages aren't surprising. retries, reroutes, failover behavior, and increased telemetry are often necessary to restore or maintain service. The customer may only see a degraded experience, but behind the scenes, systems can become significantly more expensive to run during disruption. For finance teams, the key is measuring cost as a baseline versus the incident window. Baseline is the normal, operating spend and performance. The incident window is the period during which the disruption occurred, comparing the two helps

quantify incremental cloud spend, labor, and commercial impact, so the business can learn and invest in the right reliability improvements. Sam Minesian, vice president of sales and marketing at USA business insurance, emphasizes that downtime is rarely a single line item. Greater than most teams' price downtime has lost revenue, but the bigger cost is the ripple greater than effect, missed commitments, customer trust, and the internal scramble that greater than pulls people off their core work, Minesian said. The insurance lenses, When companies think about risk, they often focus on a policy. In practice, the biggest difference maker is preparedness. Who owns what, what gets documented, and how quickly the business can

stabilize operations when something breaks. Business preparedness incidents become more expensive when responses are improvised, clear ownership, an incident response plan, and consistent documentation reduce confusion and shorten recovery time, especially when vendors, contracts, and service commitments are involved. When an incident hits, preparedness matters. Clear ownership, a documented plan, and a clean record of what happened can make the difference between a quick recovery and a long, expensive mess, Mienasian said. Global employee continuity for distributed companies, resilience also depends on people's availability. Time zones are one challenge, while travel and international assignments add another. If a key employee is abroad, traveling for work or living overseas, unexpected disruptions can remove them from rotation. and slow response efforts. International citizens insurance supports this people continuity, layer with solutions such as international health insurance, expatriate insurance, travel insurance, international life insurance,

and corporate group coverage for global employees, helping companies reduce friction when employees need support across borders. Companies build redundancy into systems, they should also build it into their workforce. Global employee coverage and clear escalation plans help teams stay operational even when someone is suddenly unavailable, Cronin shared. Mini Model Plus checklist, a simple way to estimate downtime cost is, downtime cost equals SLA credits or lost revenue, plus support load, plus engineering hours times loaded rate, plus incremental cloud spend during the incident window,

plus churn risk proxy. Downtown cost checklist. Define incident windows and tag incident related spend. Establish severity levels, clear owners, and a communication. path. Centralize runbooks and test access quarterly. Build follow the sun coverage and backups for travelers, expats, run postmortems that produce at least one measurable improvement. Closing thoughts. Reliability costs money and incidents cost more. The most resilient companies don't just hope outages won't happen. They measure impact, reduce variance, and invest where it moves the

needle. For modern CFOs, that means treating cloud spend discipline and people continuity as part of the same risk stack. The goal is not perfection, but fast recovery, and fewer expensive surprises. This story was published under Hackernoon's business blogging program. Thank you for listening to this Hackernoon story, read by artificial intelligence. Visit hackernoon.com to read, write, learn and publish.