The Real Risks of Relying on SLAs & Uptime Guarantees

Service Level Agreements (SLAs) and “99.9% uptime” guarantees sound reassuring. They’re often used to justify vendor choices, calm internal stakeholders, and tick procurement boxes.

But here’s the uncomfortable truth: SLAs don’t prevent outages. They don’t stop cyber incidents. And they rarely cover the real cost of downtime.

If your business relies on cloud software, payment systems, hosted phone lines, IT support, logistics platforms, or any third-party technology, an SLA is only one small part of risk management. In this guide, we’ll break down what SLAs actually do, where they fall short, and how to protect your business when (not if) something goes wrong.

What an SLA and “Uptime Guarantee” really means

An SLA is a contract clause that sets a minimum performance standard for a service. Most commonly it covers:

• Service availability (uptime percentage)

• Support response times (e.g., “P1 incidents responded to within 1 hour”)

• Resolution targets (sometimes)

• Maintenance windows and exclusions

• Service credits or refunds if targets aren’t met

An “uptime guarantee” is typically a headline metric like 99.5%, 99.9%, 99.95% or 99.99% availability over a month.

The first risk is psychological: these numbers feel like certainty. They’re not.

The maths that catches people out

Uptime percentages translate into real downtime. Roughly:

• 99.9% uptime allows ~43 minutes downtime per month

• 99.5% uptime allows ~3 hours 36 minutes downtime per month

• 99.99% uptime allows ~4 minutes downtime per month

Those are averages. You might get a full month with no issues, then a single incident knocks you offline for hours.

And crucially: many SLAs measure uptime in ways that don’t match your real-world experience.

Risk 1: The SLA definition of “down” may not match yours

Most SLAs define “unavailable” very narrowly. The service might be technically “up” while still being unusable for your team.

Common examples:

• The login page loads but users can’t authenticate

• The dashboard loads but reports time out

• The API responds but with errors or severe latency

• Only one region is affected (and you happen to be in it)

• Only certain features are down (but they’re the features you need to operate)

If the vendor can argue the service was “available” according to their monitoring, you may not qualify for any remedy.

Latency is downtime in disguise

A system that takes 30 seconds to load a page isn’t “down” on paper. In practice, it can cripple productivity, increase errors, and cause customer churn.

Many SLAs either exclude latency entirely or set thresholds that are far too generous.

Risk 2: SLAs often exclude the incidents that hurt most

Even when a service is genuinely down, the SLA may not apply. Typical exclusions include:

• Scheduled maintenance

• Emergency maintenance

• Force majeure events

• Internet or telecoms issues outside the vendor’s control

• Misconfiguration by the customer

• Third-party dependencies (e.g., upstream cloud provider)

• Security incidents, DDoS attacks, or “malicious activity”

This is where businesses get caught: the event that causes the biggest operational disruption is often the very event the SLA excludes.

Risk 3: Service credits rarely cover your real losses

Most SLAs don’t pay cash compensation. They offer service credits.

For example, if uptime drops below a threshold, you might receive:

• 5% of your monthly fee

• 10% of your monthly fee

• 25% of your monthly fee (for severe breaches)

That sounds fair until you compare it to the true cost of downtime.

The real cost of downtime is multi-layered

Downtime costs aren’t just “lost sales.” They include:

• Staff idle time (and overtime to catch up)

• Missed deadlines and contractual penalties

• Customer churn and reputational damage

• Increased support volume and complaint handling

• Manual workarounds (and the errors they create)

• Data recovery and remediation costs

• Regulatory exposure (GDPR, FCA, PCI DSS, etc.)

If your business loses £20,000 in a day due to a platform outage, a 10% service credit on a £300/month subscription is effectively meaningless.

Risk 4: You may have to claim — and prove — the breach

Many SLAs require you to submit a claim within a short window (sometimes 7–30 days). They may also require:

• Detailed incident logs

• Proof of impact

• Evidence that you followed the vendor’s escalation process

• Confirmation that your own systems were functioning

If you don’t claim correctly, you get nothing.

And if the vendor’s monitoring says uptime was within target, you’re likely to lose the dispute.

“We didn’t see it” is common

Your users can be locked out, or your transactions can fail, while the vendor’s status page shows “All systems operational.”

That’s why independent monitoring is essential (we’ll cover this later).

Risk 5: Uptime is not the same as resilience

A vendor can hit an uptime target and still be a poor operational risk.

Resilience is about how a service behaves under stress:

• How quickly it detects incidents

• How quickly it fails over

• Whether it degrades gracefully

• How quickly it restores full performance

• Whether it communicates clearly during incidents

A service that suffers frequent “brownouts” (partial failures) may still meet an SLA while causing constant disruption.

Risk 6: SLAs don’t address data loss, corruption, or integrity

Many businesses assume “cloud” equals safe. But outages aren’t the only threat.

Data risks include:

• Accidental deletion

• Sync errors

• Corruption during updates

• Ransomware impacting connected systems

• Vendor-side bugs that overwrite records

• Incomplete backups or failed restores

An SLA that promises availability does not guarantee your data is intact, recoverable, or correct.

Backups are not always your vendor’s responsibility

Some vendors explicitly state that you are responsible for backing up your own data. Others provide backups but limit:

• How far back you can restore

• How quickly restores happen

• Whether restores are included in your plan

If your operations depend on data accuracy (finance, customer records, compliance logs), you need a separate data protection plan.

Risk 7: SLAs don’t cover your downstream dependencies

Modern businesses are built on stacks:

• Cloud hosting

• Identity providers (SSO)

• Payment gateways

• Email and messaging

• CRM and ticketing

• Analytics and reporting

• APIs and integrations

You might have a strong SLA with your main vendor, but if their upstream provider fails, you still suffer.

And if your own business relies on multiple vendors, the combined risk is higher than any single SLA suggests.

The “weakest link” problem

If your checkout depends on three services and any one can fail, your real availability is the product of all three.

Even if each vendor offers 99.9% uptime, your end-to-end uptime can be materially lower.

Risk 8: SLAs can create a false sense of security in procurement

SLAs are often used as a shortcut in vendor selection:

• “They offer 99.99% — they must be reliable.”

• “They’re a big brand — they’ll be fine.”

• “The contract has an SLA — we’re covered.”

This mindset pushes teams to underinvest in:

• Business continuity planning

• Incident response

• Redundancy and failover

• Cyber resilience

• Staff training and tabletop exercises

In other words, the SLA becomes a comfort blanket.

Risk 9: Status pages and comms are often too slow for real operations

During an incident, what you need is:

• Fast confirmation that the issue is real

• Clear scope (who is affected)

• Honest timelines

• Workarounds nMany vendors provide vague updates:

• “We are investigating…”

• “We have identified the issue…”

• “We are monitoring…”

That’s not operationally useful when you’re trying to:

• Inform customers

• Re-route work

• Decide whether to switch to manual processes

• Meet regulatory reporting timelines

A vendor can still meet their SLA while communicating poorly.

Risk 10: SLAs don’t protect you from regulatory and contractual exposure

For many UK businesses, downtime and data incidents create compliance risk.

Depending on your sector, you may have obligations around:

• GDPR (personal data availability and integrity)

• FCA operational resilience expectations (for regulated firms)

• PCI DSS (payment security and monitoring)

• Contractual commitments to your own customers

• Industry-specific rules (healthcare, finance, critical infrastructure)

If your supplier fails, regulators and customers don’t accept “but the vendor had an SLA” as a defence.

What to do instead: Practical ways to reduce reliance on SLAs

You don’t need to ignore SLAs. You need to treat them as one control among many.

Here are practical steps that reduce your risk.

1) Read the exclusions and measurement method

Before signing:

• How is uptime measured (vendor monitoring vs customer experience)?

• What counts as “unavailable”?

• Are partial outages included?

• Are API failures included?

• What are the exclusions?

• What is the claims process?

If you can’t get clear answers, that’s a red flag.

2) Use independent monitoring

Set up your own monitoring from the locations your users operate in. Monitor what matters:

• Login

• Key workflows (checkout, quote, booking)

• API endpoints

• Latency thresholds

This helps you:

• Detect issues faster than the vendor

• Prove impact if you need to claim

• Understand real user experience

3) Build a business continuity plan (BCP) for key systems

For each critical system, document:

• What happens if it’s unavailable for 1 hour, 1 day, 1 week

• Manual workarounds

• Who decides to switch to fallback mode

• How you communicate internally and externally

• What data you must capture during downtime

Then test it.

4) Reduce single points of failure

Depending on your operations, this might include:

• Secondary internet connection (failover)

• Backup payment method/provider

• Offline access to key documents

• Redundant communications (phone, email, WhatsApp, Teams)

• Local exports of critical customer lists and schedules

You don’t need to duplicate everything — just the parts that stop you trading.

5) Negotiate the SLA where it matters

If you have leverage (or you’re buying an enterprise plan), negotiate:

• Stronger definitions of downtime

• Inclusion of latency and partial outages

• Higher service credit tiers

• Faster support response for critical incidents

• Clear escalation paths

• Named account management

• Reporting and post-incident reviews

Even small changes can materially improve your position.

6) Treat vendor risk like a business risk, not an IT detail

Vendor outages impact:

• Revenue

• Customer trust

• Legal exposure

• Staff productivity

• Brand reputation

Make it visible at leadership level. Track:

• Incident frequency

• Mean time to resolve

• Communication quality

• Root cause transparency

• Dependency mapping

7) Consider insurance as a backstop (not a substitute)

SLAs don’t cover your losses. Depending on your business, insurance may help with:

• Business interruption (including non-damage BI in some cases)

• Cyber incident response and recovery

• Data restoration costs

• Liability arising from service failures nInsurance isn’t a replacement for resilience — but it can stop a bad incident becoming a business-ending one.

A quick checklist: Are you over-relying on SLAs?

If you answer “yes” to any of these, you likely have a gap:

• We assume the vendor will compensate us if they go down

• We don’t have independent monitoring

• We don’t know the SLA exclusions

• We don’t have a documented workaround for outages

• We don’t know our upstream dependencies

• We can’t operate for a day without this system

• We’ve never tested a downtime scenario

Final thought: SLAs are a promise about averages — risk is about worst days

SLAs are useful, but they’re not protection. They’re a contract mechanism that usually limits a vendor’s liability, not a guarantee that your business will stay operational.

The businesses that handle outages best aren’t the ones with the best SLAs. They’re the ones that plan for failure, monitor what matters, and build resilience into how they operate.

If you want, tell me what type of service you’re thinking about (cloud software, telecoms, hosting, payments, etc.) and I can tailor this into an industry-specific version with examples and a stronger call-to-action.