Insurers reportedly could be facing hundreds or thousands of business interruption claims resulting from the Microsoft outage that began late Thursday (July 18).
Economic damages from the event, which crippled industries and inconvenienced consumers around the world, could amount to tens of billions of dollars, Reuters reported Friday (July 19).
Nir Perry, CEO at cyber insurance risk platform CyberWrite, said in the report that the outage should be considered an “event that can produce what could be defined as an insurance catastrophe.”
At the same time, not all businesses’ lost time and money will be covered by insurance, according to the report.
Coverage for an event like this could be something that would have to be purchased separately, the businesses’ insurance policy could exclude non-malicious events, or there could be deductibles and waiting periods, the report said.
Law firm Hunton Andrews Kurth wrote in a Friday blog post that firms affected by the outage should check their insurance policies.
“If you have been impacted by today’s outage, we recommend reviewing your company’s cyber insurance program to determine whether your losses may qualify for coverage,” the post said. “Prompt notice is critical to obtaining coverage under your cyber insurance policy, so check your policy today.”
As PYMNTS reported earlier on Friday, the outage struck users of Microsoft’s Windows operating system late Thursday and early Friday and was caused by cybersecurity firm CrowdStrike’s software update.
CrowdStrike CEO George Kurtz said in a Friday post on X: “CrowdStrike is actively working with customers impacted by a defect found in a single content update for Windows hosts.”
CrowdStrike is actively working with customers impacted by a defect found in a single content update for Windows hosts. Mac and Linux hosts are not impacted. This is not a security incident or cyberattack. The issue has been identified, isolated and a fix has been deployed. We…
— George Kurtz (@George_Kurtz) July 19, 2024
Microsoft said it was “aware of an issue affecting Windows devices due to an update from a third-party software platform,” Bloomberg reported Friday.
The impact of the outage was global and spread across industries.
For example, both UPS and FedEx told their customers Friday that package deliveries may be delayed due to the software outage.
Hospitals were also among the organizations hit hard by the software outage, with Bloomberg reporting Friday that without the digital systems they normally use, they are having trouble booking patient appointments and checking medical records, pausing the start of procedures that require anesthesia, canceling elective procedures and closing outpatient clinics.
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