Parametrix, the leading provider of digital business interruption risk solutions, has today launched a new type of performance guarantee, backed by parametric insurance. The insurance guarantees contractual performance obligations made by large enterprises for the uninterrupted delivery of their platform or service. Unlike traditional performance assurances, payouts are triggered automatically when an insured system interruption occurs.
Performance guarantees backed by parametric insurance provide enterprises with the financial safety needed to deepen trust in technology adoption, gain a competitive advantage, and unlock upfront payments from clients. This guarantee can take the form of a Service Level Agreement (SLA), ensuring compensation for unmet uptime commitments, or a performance warranty, covering financial losses from service disruptions. Securing these obligations with insurance enables businesses to enhance reliability and reinforce client confidence.
By focusing on the performance outcome rather than a specific peril, it offers a streamlined alternative to traditional policies like property, cyber, and E&O insurance. This enables enterprises to meet contractual performance obligations more cost-effectively, while simplifying their risk management strategies.
Parametrix developed this new solution in response to multiple requests from enterprises for a product that builds trust in technology among clients and markets. The parametric insurance behind it, underwritten at Lloyd’s of London, enables companies to safeguard their financial stability and protect clients’ interests.
A standout application is its use by digital infrastructure service providers that offer SLAs to enterprise clients. In the event of a performance breach, the guarantee can offer clients quick reimbursement for losses defined under the SLA, delivering financial certainty and encouraging greater adoption of specific cloud-based solutions.
Key features include:
- Warranty limits from $2M to $75M
- Predefined triggers for lightning-fast payouts. Reimbursements are automatic when activated by measurable performance metrics such as system downtime in excess of a specified threshold.
- Customizable benchmarks. Warranties can be structured to align with key metrics such as minimum uptimes, transaction throughputs, or processing times to ensure coverage matches operational risks.
- Scalable for business growth. Performance guarantees can be adjusted to evolving technology stacks and specific business needs.
- Financial certainty. Clear, upfront understanding of potential liabilities to enable greater predictability in financial planning and risk management.
“Parametrix is committed to make technology more secure by eliminating the financial risk of system failures,” said Parametrix Chief Executive Officer, Jonathan Hatzor. “This new performance guarantee is not just a safety net. It’s a strategic enabler that allows companies to protect what matters most: their reputation, resources, and relationships.”
About Parametrix
Parametrix, the leading provider of digital business interruption risk solutions, is a Managing General Agent and Lloyd’s Coverholder based in New York that underwrites parametric insurance against digital supply chain interruption. Parametrix uses proprietary technology to continuously monitor the performance of a variety of third-party IT services across the globe, and to collect granular data on service interruptions. It uses that data to assess risk, provide instant insurance quotations, and to streamline claims payments, which are delivered within days. Parametrix policies are backed by major A-rated global insurers.
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