How to create a cloud security policy: Guide & template

In a world where data breaches make headlines and compliance violations incur hefty penalties, having a robust cloud security policy is non-negotiable. But creating one from scratch can feel overwhelming, especially with the rapid adoption of cloud computing across industries.

Statistics indicate that 96% of companies use public cloud services and store 60% of their business data in the cloud, making the stakes for security higher than ever. That's why we've put together this comprehensive guide to help you craft effective cloud security policies that protect your organization's data and ensure compliance. Let’s dive in.

What is a cloud security policy?

A cloud security policy is a set of rules and guidelines that govern how an organization's cloud environment and the data within it is secured. It establishes clear protocols for access control, data protection, compliance, incident response, and more. Think of it as a roadmap for keeping your cloud-based assets safe from cyber threats and ensuring regulatory compliance.

Imagine a healthcare provider that uses cloud-based applications to store and manage patient data. Without a clear policy in place, there's a risk that this sensitive information could be accessed by unauthorized parties or fall out of compliance with HIPAA regulations. A well-defined cloud computing policy would outline specific measures to prevent this, such as encrypting data at rest and in transit, implementing strict access controls, and regularly auditing user permissions.

Components of a cloud security policy

A well-rounded cloud security policy will cover several critical areas:

• Access management and authentication: Who can access what cloud resources, and how are their identities verified? This includes specifying password complexity requirements, mandating multi-factor authentication (MFA), and outlining the process for granting and revoking user permissions.
• Data encryption: How is data protected both in transit and at rest? The policy should specify approved encryption algorithms and key management practices to ensure the confidentiality and integrity of sensitive information.
• Incident response: What's the game plan for handling security breaches or other incidents? A clear incident response plan should be outlined, including roles and responsibilities, communication protocols, and steps for containment, eradication, and recovery.
• Compliance standards: Which regulatory frameworks must be adhered to, and how will compliance be maintained? The policy should align with relevant standards such as GDPR, HIPAA, PCI DSS, or ISO 27001, depending on the industry and geographic scope.
• Monitoring and reporting: How are cloud activities tracked, and how are anomalies or potential threats identified? The policy should define logging and monitoring requirements, as well as procedures for regular security reporting to stakeholders.
• User training: How are employees educated on secure cloud practices, and how often? The policy should mandate regular security awareness training for all cloud users to minimize the risk of human error and insider threats.
• Third-party management: How are vendor security risks assessed and managed? The policy should extend security requirements to all third parties with access to the organization's cloud environment, requiring third-party vendors to meet the organization's security standards and undergo regular security audits, such as SOC 2 or ISO 27001 certification.

Why are cloud security policies important?

Without a cloud security policy, organizations are essentially leaving their data doors unlocked. Breaches become not a matter of if, but when. Gartner predicts that through 2025, 99% of cloud security failures will be the customer's fault, primarily due to misconfigurations and inadequate change control. Compliance violations are also more likely, which can result in financial penalties, reputational damage, and even legal action.

Consider the cautionary tale of Capital One. In 2019, the company suffered a massive data breach that exposed the personal information of over 100 million customers. The cause? A combination of a misconfigured web application firewall (WAF) and overly broad access permissions, which allowed an attacker to exploit a vulnerability in Capital One's AWS infrastructure. A more rigorous cloud security policy, focused on securing access and configurations, could have potentially prevented such a breach.

Given these risks, it's clear why organizations need strong cloud security policies. Here are several key advantages of implementing one:

Improved data security

By spelling out exactly how data should be handled, stored, and protected, organizations can significantly reduce the risk of breaches and unauthorized access. This is especially critical for industries dealing with sensitive data, such as healthcare, finance, and government.

Meeting regulatory requirements

A policy aligned with relevant compliance standards helps organizations avoid hefty penalties and demonstrates their commitment to data protection. This not only keeps them on the right side of the law but also boosts customer trust.

Reducing operational risks

With clear protocols in place, there's less room for human error or confusion that could lead to security lapses. A strong risk management approach helps to mitigate risks effectively. A well-defined policy also ensures consistency in security practices across the organization, regardless of department or location.

Enhancing customer trust

We live in a world where customers are more aware than ever of the importance of data security. They want to do business with organizations they can trust to protect their information. A strong cloud security policy helps build that confidence by demonstrating a proactive, comprehensive approach to security.

How to create a cloud security policy: 9 steps

Step 1. Define the objectives of the policy

Start by clarifying what you want the policy to achieve. Is the primary goal to prevent data breaches? Ensure compliance with specific regulations? Support secure remote work? A clear understanding of your goals will help shape a more effective policy and keep everyone on the same page.

Step 2. Identify regulatory and compliance requirements

Make a list of all the compliance standards your organization is beholden to, whether that's GDPR, HIPAA, PCI DSS, SOC 2, ISO 27001, or others. Work closely with your legal and compliance teams to ensure all relevant regulations are accounted for, including industry-specific standards and regional data protection laws that may apply based on where your customers reside.

Step 3. Develop a policy framework

Outline the key sections your policy will include, such as:

• Purpose and scope
• Everyone's roles and responsibilities
• How data will be classified and handled
• Security measures like access control and encryption
• Plans for dealing with incidents
• Compliance considerations
• Working with third parties
• Acceptable use guidelines
• How the policy will be maintained over time. 

Having a clear structure will ensure all the important bases are covered.

Step 4. Inventory cloud resources

Make a complete inventory of all the cloud services and resources being used across the organization. This includes things like virtual machines, storage, databases, and applications, whether they're managed by IT or being used by individual teams. Having this full picture is crucial for ensuring the policy covers everything it needs to.

Step 5. Conduct a risk assessment

With your cloud inventory in hand, the next step is to identify and prioritize the unique security risks facing each resource. This could include things like misconfigurations, missing patches, overly broad user permissions, insecure APIs, lack of encryption, insufficient logging, and any compliance gaps. Prioritize the risks based on how likely they are to happen and how big their potential impact could be.

Step 6. Outline security measures

Based on the prioritized risks, define the specific security controls and measures that will be put in place to address them. This will likely include steps like:

• Implementing least privilege access and zero trust principles
• Requiring MFA for all cloud accounts
• Encrypting sensitive data with industry-standard algorithms
• Segmenting cloud networks and resources based on data sensitivity
• Monitoring cloud logs for anomalous activity
• Conducting regular vulnerability scans and penetration tests
• Implementing data loss prevention (DLP) controls
• Requiring regular backups and disaster recovery drills

Be sure to map these controls back to your compliance requirements to ensure you're meeting all necessary standards.

Step 7. Assign roles and responsibilities

Lay out who will be in charge of implementing and enforcing different parts of the policy. This will span multiple teams, like IT managing technical controls, security handling monitoring and incident response, and compliance ensuring regulatory obligations are met. Spelling out clear responsibilities keeps things from slipping through the cracks.

Step 8. Develop an incident response and recovery plan

Effective security requires being prepared for when things go wrong. The policy should include a detailed playbook for responding to potential incidents. This means designating a response team, defining procedures for detecting and containing the incident, outlining a communication plan, and deciding when outside parties need to be notified. There should also be a disaster recovery plan mapping out how to keep the business running in a crisis, like failing over to backups, restoring data, and getting back to normal.

Step 9. Review, update, and disseminate the policy regularly

The policy needs to be treated as a living document. Plan to review and update it at least twice a year, or more often if needed, to keep up with changes to the cloud environment, evolving threats, new compliance requirements, and organizational shifts. Have a clear process for gathering input and suggestions from stakeholders and folding them into the policy. And don't forget to push out the latest version to all employees and provide ongoing training so everyone knows their role in keeping things secure.

Cloud security policy template & examples

To help jumpstart your policy creation, here's a template covering the essential components. Tailor it to fit your organization's unique needs and environment:

Purpose

The purpose section should clearly state the main objectives of the cloud security policy. 

Example: The purpose of this cloud security policy is to establish guidelines and requirements for securing company data stored and processed in cloud environments. The policy aims to protect the confidentiality, integrity, and availability of information assets, maintain compliance with relevant regulations, and manage risks associated with cloud adoption.

Scope

The scope section defines the boundaries of the policy, specifying who and what it applies to. It should cover all users, systems, and data related to the company's cloud services.

Example: This policy applies to all employees, contractors, cloud service providers, and third-party vendors who access or manage the company's cloud services. It covers all data stored, processed, or transmitted through these services, regardless of the device used for access.

Data classification

This section categorizes data based on its sensitivity and criticality. It helps determine the appropriate level of security controls for each data type.

Example: Company data stored in the cloud will be classified into three categories:

• Restricted: Highly sensitive data, such as personal health information (PHI), personally identifiable information (PII), financial records, and trade secrets.
• Confidential: Moderately sensitive data, including proprietary information, employee records, and internal communications.
• Public: Non-sensitive data approved for public release, such as marketing materials and press releases.

Roles and responsibilities

This section defines the key roles involved in cloud security and outlines their responsibilities. It ensures accountability and clarifies who is responsible for specific tasks.

Example:

• Security team: Develops and oversees the cloud security strategy, ensures compliance with policies and regulations, and reports to senior management. This includes both cybersecurity and information security functions.
• IT department: Implements and manages security controls, monitors for threats, responds to incidents, and provides technical support.
• Data owners: Classify data, define access requirements, review and approve access requests, and ensure data accuracy and quality.

Incident response

The incident response section outlines the procedures for detecting, reporting, investigating, and recovering from security incidents in the cloud. It ensures a swift and coordinated response to minimize the impact of incidents.

Example:

• The IT department will maintain an incident response plan aligned with the company's overall incident management process.
• All employees must report suspected security incidents or policy violations to the IT department immediately.
• The incident response team will lead the investigation and document all incidents, notifying relevant authorities and affected parties as required by law or contractual obligations.

Security controls

This section details the specific technical and administrative controls implemented to protect cloud data and systems. It covers a wide range of security measures, such as encryption, network security, logging, and vulnerability management.

Example:

• All data stored in the cloud must be encrypted at rest using AES-256 or stronger, and data transmitted to/from the cloud must be encrypted in transit using TLS 1.2 or above.
• Cloud environments will be segmented based on data sensitivity and business function to minimize the impact of a potential breach.
• User activities and system events in the cloud will be logged and monitored for suspicious or unauthorized activity.
• Regular vulnerability scans and penetration tests will be conducted to identify and remediate security weaknesses in cloud services and configurations.

Access control 

This section outlines the processes and controls for granting, reviewing, and revoking access to cloud resources. It helps ensure that users have only the necessary permissions to perform their job functions.

Example:

• Access to cloud services will be granted based on the principle of least privilege and job requirements.
• All cloud accounts must be protected by multi-factor authentication (MFA).
• User access rights will be reviewed quarterly, and access will be promptly revoked for terminated employees or those changing roles.

Policy compliance

The compliance section details how the policy will be enforced, the consequences of non-compliance, and the process for reviewing and updating the policy.

Example:

• The information security team is responsible for enforcing this policy and ensuring compliance across the organization.
• All cloud users must attend annual security awareness training, which includes education on this policy and secure cloud practices.
• This policy will be reviewed and updated annually, or more frequently if significant changes occur in the company's cloud usage or the threat landscape.

Acceptable use

The acceptable use section defines the permitted and prohibited uses of cloud services. It helps prevent misuse and ensures that cloud resources are used only for business purposes.

Example:

• Employees may only use cloud services approved by the IT department (see appendix A for the list of approved services).
• Restricted and confidential data must be encrypted when stored in the cloud and should not be shared externally without prior approval from the data owner and IT department.
• Cloud services must not be used for any illegal, unethical, or unauthorized activities, such as copyright infringement, hacking, or distributing malware.

Compliance

The compliance section identifies the relevant laws, regulations, and industry standards that the organization must comply with when using cloud services. It ensures that the cloud security policy aligns with these requirements.

Example: The organization is committed to complying with the following laws, regulations, and standards in its use of cloud services:

• General data protection regulation (GDPR)
• Health insurance portability and accountability act (HIPAA)
• Payment card industry data security standard (PCI DSS)
• National institute of standards and technology (NIST) cybersecurity framework
• Center for internet security (CIS) controls

The information security team, in collaboration with the legal and compliance departments, will ensure that the organization's cloud security practices align with these requirements. Regular security audits and assessments will be conducted to maintain compliance.

Business continuity and disaster recovery

This section addresses the measures in place to ensure the availability and recoverability of cloud services and data in the event of a disruption or disaster.

Example:

• Critical cloud data will be automatically backed up daily to a geographically separate and secure location.
• The IT department will develop and annually test a disaster recovery plan (DRP) for each critical cloud service to ensure timely restoration of services.
• Service level agreements (SLAs) with cloud providers will be reviewed annually to ensure they meet the company's recovery time and recovery point objectives.

Rippling: Improve and build effective cloud security policies

While creating a cloud computing security policy is essential, managing and enforcing it across a complex IT environment is no easy feat. That's where Rippling shines.

The platform simplifies cloud security policy management with features like:

• Automated monitoring to detect misconfigurations and vulnerabilities
• Role-based access control to ensure users have appropriate permissions
• Real-time compliance tracking against standards like GDPR, HIPAA, and PCI DSS
• Single sign-on for secure, streamlined access to all your cloud applications
• Zero-trust security model implementation with continuous authentication and authorization
• Centralized visibility across your entire cloud ecosystem

The best part? It's all integrated with Rippling's suite of HR, IT, and security solutions, so you can manage your workforce, devices, apps, and security policies in one place. With Rippling, you can spend less time juggling disparate tools and more time focusing on your core business.

Cloud security policy FAQs

What is the cloud security policy standard?

There is no singular cloud security policy standard. Most organizations align their policies with widely accepted security frameworks like ISO/IEC standards, NIST, Cloud Security Alliance (CSA) STAR, SOC 2, PCI DSS or the FedRAMP (Federal Risk and Authorization Management Program).

What are the main categories of cloud security?

Cloud security encompasses multiple layers of protection working together. This includes infrastructure security to protect the underlying systems, data security to safeguard information, and access security to control who can reach cloud resources. Additional categories include network security, application security, and operational security—all essential for complete cloud protection.

How often should a cloud security policy be updated?

Best practices recommend reviewing the policy annually, at a minimum, to assess its effectiveness, identify gaps, and incorporate lessons learned. The policy should also be updated whenever significant changes occur, such as adopting new cloud services, changes in risk assessment, modifications to laws or standards, major security incidents, or changes in the organization's structure.

This blog is based on information available to Rippling as of December 20, 2024.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.