CSP Downtime Credit

These compensations are typically calculated as a percentage of the monthly subscription fee the client pays for the CSP (Cloud Service Provider) services during the month the downtime occurred, per the provider’s policy. Most service providers cap their liability, limiting service credits to between 10% – 50% the monthly fee. However, some may offer credits up to 100% for a single month but you need to check your Service Level Agreement to understand the terms. These caps are generally in place to shield the provider from excessive financial losses. If a provider does offer higher caps, it often indicates greater confidence in their service reliability or that they have significant profit margins to absorb potential losses.

Instead of refunds, CSPs typically offer SLA credits applied to the subsequent month’s bill. Typically, these credits cannot be used towards any other fees under different agreements with the provider. The provision of SLA credits often represents the sole remedy available to clients for service disruptions.