CrowdStrike Incident’s Ripple Effect on the Cyber Insurance Market
Navigating the Aftermath: Lessons from the CrowdStrike Cyber Outage
On July 19th, the CrowdStrike cybersecurity incident reverberated across global financial institutions, airlines, healthcare facilities, and government offices, disrupting operations worldwide.
According to CrowdStrike, a faulty sensor configuration update in its cybersecurity platform triggered the widespread computer outage. Although the issue was resolved within 24 hours, its impact may ripple through the cyber insurance market.
Market Insights:
These events underscore the critical need for robust cybersecurity measures and comprehensive cyber insurance coverage. In response to the incident, we consulted with key carrier partners, gathering their perspectives.
One domestic underwriter expressed cautious optimism regarding potential claims, suggesting, “While details are still emerging, initial indications suggest coverage under Operational or Administrative Error. I doubt this alone will harden the market, especially given the prompt resolution by CrowdStrike.”
Conversely, a Lloyds underwriter took a more somber view, stating, “Business income losses should generally be covered under Business Interruption or Dependent Business Interruption policies. This event underscores the systemic risk posed by third-party dependencies, potentially prompting carriers to reassess pricing and coverage availability.”
Implications for Clients:
This incident may prompt financially strained insurers to reconsider their cyber insurance offerings, potentially tightening underwriting criteria and reducing coverage options.
Kevin Merchant from Wholesure advises, “Given recent large-scale cyber incidents like the CDK ransomware payout, I recommend retail agents strongly consider cyber insurance for all clients, as the market is likely to toughen.”
Client Recommendations:
As phishing attempts impersonating CrowdStrike, Microsoft, and other vendors are expected to rise, encourage your clients to remain vigilant. To mitigate risks:
– Avoid downloading software or updates from unsolicited emails.
– Review internal cyber outage policies and procedures.
– Immediately report suspicious emails to administrators.
– Retail insurance agents should consult and work with cyber-focused wholesale brokers to verify optimal insurance coverage for all clients.
This ongoing situation underscores the evolving cyber threat landscape, necessitating proactive risk management and insurance strategies.
About the Author
Kevin Merchant focuses daily on assisting retail insurance agents find solutions for their hard-to-place professional liability, management liability and cyber liability insurance risks. Kevin is based out of Tampa, FL, and can be reached directly at [email protected].
Wholesure Brokers Focused on Cyber Insurance
- Kevin Merchant – Tampa, FL – [email protected]
- Chris Votta – New Jersey – [email protected]
- Chris Monfort – St. Petersburg, FL – [email protected]
- Jackie Jacobs – Tampa, FL – [email protected]
- Matt DeCew – San Diego, CA – [email protected]
- Anthony Bottone – New Jersey – [email protected]
- Mark Dion – Tampa, FL – [email protected]
- Stephen Maniscalco (Healthcare) – St. Petersburg, FL – [email protected]
- Raffi Kodikian – San Francisco, CA – [email protected]
- Peter Stavrakos – Sarasota, FL – [email protected]
- Dan Vecchio – Chicago, IL – [email protected]
- Casey Kerns – St. Petersburg, FL – [email protected]
- Jaimee Williams – Boone, NC – [email protected]
