Global IT outages will happen again: How will the insurance industry respond?
As fresh digital interruptions occur, insurance carriers may restrict or withhold some cyber coverages altogether.
Insurance carriers and their customers can expect another global IT outage like the one that brought business to a relative standstill on Fri., July 19, 2024.
Sam Levine, CAC Specialty senior vice president and cyber solutions professional, said in an interview with PropertyCasualty360 that once a largescale outage happens, insurance carriers are likely to begin restricting coverage, charging higher premiums, increasing waiting periods, or not offering the coverage at all.
“Some insurers look to limit their exposure in this space by having specific exclusions for infrastructure and widespread issues,” she said. “Others reduce limit for anything that is a system failure.”
A software update by the cybersecurity firm CrowdStrike impacted organizations worldwide that use Microsoft Windows, subsequently interrupting hospital systems and media outlets, booting banks offline, delaying thousands of flights, and disrupting routine tasks and daily business transactions.
At press time, CrowdStrike was actively working with customers impacted by the defect found in a single content update for Windows hosts, the company said in a statement following the outage.
“Mac and Linux hosts are not impacted,” the company said. “This was not a cyberattack. The issue has been identified, isolated and a fix has been deployed. We refer customers to the support portal for the latest updates and will continue to provide complete and continuous updates on our website.”
Meanwhile, FlightAware indicated that 37,160 flight delays and 4,136 cancellations worldwide happened during the initial hours of the outage, with 8,651 delays in the U.S. and 2,553 cancellations.
At the same time, ABC News reported at least 12 hospital systems in the U.S. were affected by the IT outage, with some reporting a cancellation of elective procedures.
Systems impacted include the Cleveland Clinic, Cincinnati Children’s, Kaleida Health/Cayuga in Buffalo, Harris Health System in Texas, Hospital for Special Surgery in New York City, Martha’s Vineyard Hospital, Mass General, Memorial Hermann in Texas, Mount Sinai in New York, Nationwide Children’s Hospital in Ohio and Ohio State University Wexner Medical Center, according to ABC News.
Data compiled by Downdetector showed Bank of America, Capital One, Chase, TD Bank, and Wells Fargo have also been impacted by large-scale outage, with investment firms like Charles Schwab, Fidelity Investments, and TD Ameritrade also reporting outages.
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