PriyaPatel
TLDR:
Insurers may face a surge in business interruption claims following a global tech outage caused by a software update from CrowdStrike. However, not all businesses may have coverage for such losses under their current policies, and this event could potentially lead to legal claims against CrowdStrike and Microsoft.
Main Article:
Insurers could face a raft of business interruption claims after a worldwide tech outage crippled industries from travel to finance. A software update by global cybersecurity firm CrowdStrike appeared to have triggered systems problems that grounded flights, forced broadcasters off air, and left customers without access to services such as healthcare or banking.
Experts anticipate hundreds, if not thousands, of claim notifications from impacted organizations. However, not all businesses would have insurance cover for their lost time and money. A typical business interruption policy may not provide coverage for losses stemming from the outage. Cyber insurance policies may also have exclusions for certain events, requiring businesses to buy additional coverage.
The event could potentially result in tens of billions of dollars in economic damages and be considered an “insurance catastrophe.” Legal claims against CrowdStrike and Microsoft may also arise due to the defective update that triggered the global IT outage.
Travel insurers expect an increase in claims, particularly for travel delay and missed connection policies, as a result of the outage. Force majeure clauses may not apply in this situation, as the event could be seen as within the control of businesses and covered by cyber insurance.
Overall, the global tech outage highlights the importance of evaluating and ensuring adequate insurance coverage for potential business interruptions caused by cyber events.
