Here comes the wave of insurance claims for the CrowdStrike outage
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- CrowdStrike's outage might have cost the economy "tens of billions of dollars," said a cyber insurance exec.
- Businesses are turning to their cyber insurance providers to regain their losses.
- But not all companies have adequate coverage for such major disruptions.
Friday's massive CrowdStrike outage grounded businesses and services worldwide to a screeching halt. Now, some of those affected are looking to recoup their losses.
Damages to businesses included grounded flights, which left thousands of passengers stranded at airports, delivery delays, and closed stores and amusement parks.
"Economic damages could reach tens of billions of dollars," Nir Perry, CEO of cyber insurance risk platform Cyberwrite, told Reuters on Saturday.
CrowdStrike just owes customers a refund of its subscription fees — it doesn't have to cover the money businesses lost from the interruption. A representative for CrowdStrike didn't respond to Business Insider's request for comment on Friday about how the company will enforce its terms and conditions.
Some companies affected by the outage are turning to their insurance providers to cover losses. An executive with Marsh, the world's largest insurance brokerage, told Bloomberg on Friday that more than 75 clients have prepared to file claims in the wake of the cybersecurity meltdown.
It's still too soon to tally the full impact from Friday's disruption, spokespeople for major cyber insurance providers AXA and Munich Re told Business Insider on Monday.
For companies that file claims, the money won't come immediately, and businesses might not get back anywhere close to what they lost from the outages. Certain cyber insurance policies include coverage for non-malicious incidents, and affected businesses have to consider certain variables such as deductibles and waiting periods before making claims, Perry told Reuters.
CrowdStrike's unexpected outage hit some businesses that might not have been insured against such disruptions, which can cost more than standard cyber insurance policies, Marcos Alvarez, the head of insurance at ratings agency DBRS Morningstar, told Reuters.
Larger companies like airlines or hospitals might fare slightly better than smaller businesses recovering damages from CrowdStrike itself. They might have negotiated different terms and conditions to hold CrowdStrike accountable, said Elizabeth Burgin Waller, chair of the Cybersecurity & Data Privacy practice at Woods Rogers, who spoke to Business Insider on Friday.
A portion of insurance claims will likely cover costs like legal fees, personnel, and the loss of employee productivity.
The fallout of the CrowdStrike outage is expected to make waves in the cyber insurance industry as, Perry wrote on LinkedIn, an "event that will be referred to in the years to come when assessing risk."