Here's Why the CrowdStrike Outage is a Wake-Up Call for Business Owners to Reconsider Cyber Liability
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The CrowdStrike Outage: A Wake-Up Call for Cyber Liability Insurance
The recent CrowdStrike outage was a wake-up call for businesses worldwide. This outage proves that even the most reliable security providers can fail. No business is immune to cyber risks and our dependency on these systems can be very problematic. Let's dive into some of the details and learn why relying on your third party vendors for security and date protection isn't necessarily the best idea.
Here's what happened and why it matters:
- CrowdStrike, a major cybersecurity provider, experienced a significant outage due to a software update.
- Thousands of businesses lost access to critical security services. This outage triggered numerous problems including grounded flights and limited access to banking and healthcare.
- Many companies and individuals faced increased vulnerability to cyber threats. Timely criminals could pose as tech support or take advantage of trusting consumers.
- The incident highlighted the importance of redundancy in security systems and the dangers of reliance on only a few providers.
Cyber liability insurance is no longer optional - it's a necessity for modern businesses. Here's why:
- It provides financial protection against cyber incidents.
- Covers costs associated with data breaches and system failures.
- Offers access to expert incident response teams.
- Helps businesses recover faster from cyber events.
- Many insurers can provide resources to take a more proactive approach to cyber and data security.
What Businesses Need To Do Moving Forward: A Comprehensive Approach to Cybersecurity
The CrowdStrike outage demonstrates that relying solely on preventive measures is not enough. A robust cybersecurity strategy must include both prevention and protection. Here's what businesses need to do:
- Implement strong security measures
- Develop and regularly update incident response plans
- Invest in comprehensive cyber liability insurance and be familiar with coverage terms
Remember, in today's digital landscape, it's not a question of if a cyber incident will happen, but when.
Will my Cyber Liability Insurance policy provide coverage for this?
First and foremost, it is critical to understand that not all cyber liability policies are created equal. The CrowdStrike outage highlights a specific type of risk that may not be covered under standard policies. Here's what you need to know:
- Standard Cyber Liability Policies: These typically cover direct losses to your business from cyber events like data breaches or system failures.
- Contingent Business Interruption Coverage: This is a specialized form of coverage that some insurers offer. It can protect your business from losses resulting from outages or failures of third-party service providers, like CrowdStrike.
When reviewing your cyber insurance options, be sure to discuss contingent business interruption coverage with your insurance provider. This type of coverage could be crucial in situations like the CrowdStrike outage, where the disruption comes from a third-party service provider rather than a direct attack on your systems.
Are you prepared for the next major cybersecurity event? If not, now is the time to act. Learn more about Cyber and Data Liability here or click here to contact our team and get started with a quote.
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About the Author
Tyler Bartosh (Connect with me on LinkedIn)
A third-generation insurance agency owner and agent since 2007, Tyler Bartosh is the consummate “insurance geek,” using his passion for business, knowledge of insurance, and advocacy for clients to help serve as the expert buyer of insurance. He helps businesses implement risk management strategies that save both time and money, so those resources can be put towards other initiatives in your company.
Away from his career in insurance, he enjoys spending time with his family & friends, volunteering throughout the community, golf, fishing, snowboarding, hiking and virtually anything outdoors and traveling to see live music. Tyler has a wife Emily (who is also an underwriter in the insurance industry), their dog Lucy and a baby girl, Sophie Constance.
About Top O' Michigan Insurance Solutions:
At Top O’ Michigan Insurance Solutions, we pride ourselves on using our skills to provide clients with competitive pricing, stability and understanding, and peace of mind. With seven locations throughout Michigan and 24/7 client access, our team is your 'expert buyer' of insurance for home, auto, farm, boat, motorcycle, business owners, workers compensation, bonds, life and health, employee benefits and more.
We will provide unparalleled and caring service to our clients through our knowledgeable staff and give back to our employees, agency, industry and our communities. Part of our mission is to give back to the Michigan communities we serve. This is something we take action on through We Care and you can learn more about our community outreach at TOMIA247.com/WeCare.
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