There should just be a legal duty placed on cloud providers to not do this. Nobody would expect you to hold a second redundant commercial lease for your offices or retail location.
I think this is a tough problem, partly due to the post-paid nature of most cloud services, partly due to the impact to other customers.
If you had a bunch of retailers in a shared space (like a market), and one of them was setting off fireworks, using all the power/water in the space, and scaring away customers, I'd expect them to get kicked out pretty quickly.
Now it may be that this is a false positive, I'm sure they happen, but in the case where it's a legitimate bad actor that is actively harming both the company and other customers on those servers, what's the course of action the company should take?
Shouldn't this be covered under standard tort law?
This isn't a great example because buildings do have accidents like fires and floods. If you need business continuity you do plan on having multiple working locations.
Of course an accident is different than just randomly terminating service.