Cyber insurance can ‘avoid severe financial setbacks’ like CrowdStrike incident

A WTW director shares long-term solutions to incidents like CrowdStrike.

After CrowdStrike updated its Falcon endpoint detection and response (EDR) solution, millions of computers experienced the blue screen of death (BSOD).

“With prompt planning and readiness for high-risk cyber events together with an understanding of your liabilities and how cyber incidents could interact with your insurance coverage, you’ll be in a better position to avoid severe financial setbacks,” Omar Al-Shahery, Director of Cyber Risk Consulting said in a WTW insight.

This glitch caused widespread business interruptions, affecting hundreds of companies, airports, hospitals, and other critical services globally.

Whilst the company clarified there was no malicious intent and responded quickly, the disruption was extensive. Imagine the impact of a global cyber incident caused by malicious intent without a quick fix. 

Long-term solutions

Operational downtime from incidents like CrowdStrike extends beyond immediate revenue loss, affecting a wide range of liabilities. 

For example, airlines and hospitals impacted by CrowdStrike face substantial financial and legal liabilities due to service disruptions. Accurate quantitative analysis of potential insurable supply chain compromises is crucial for businesses relying heavily on operational continuity. Understanding liabilities and how cyber incidents could interact with your insurance coverage can help avoid severe financial setbacks.

Reducing the impact of future cyber events requires a thorough understanding of likely cyber threat scenarios. Many organisations are already quantifying cyber risk scenarios to recognise potential pain points and get ahead of specific threats. If your organisation relies on third-party solutions, meticulously quantifying the risk of third-party cyber disruptions is essential. 

This involves identifying and quantifying relevant cyber risk scenarios using actuarial and data science, forensic accounting, cyber threat intelligence, and insurance claims data. By understanding the financial impacts and prioritising mitigation options, you can safeguard your organization’s longevity and resilience. 

Achieving a comprehensive understanding of your cyber maturity capability allows you to attain the appropriate cyber risk insurance and mitigate gaps for better financial positioning.