A crack in the cyber insurance armour
Voice and Data|August 2024
Cyber outages like the Crowdstrike incident expose gaps in traditional insurance policies, emphasising the need for better coverage for operational disruptions
VERNIKA AWAL
A crack in the cyber insurance armour

On 19 July, half the world came to a standstill. Airports were clueless, hospitals ran helter-skelter, and banks and stock exchanges braced for the worst, fearing a devastating cyberattack. A couple of hours into this chaos, as more questions began to be raised, a seemingly nightmarish answer rose to the fore-the reason for such a worldwide outage that took down an overwhelming number of Windows PCs was a fault in a seemingly routine maintenance software update.

The issue brought to the fore potential trouble that could one day cost millions of dollars and damage their overall reputation. Cyber outages are different from cyberattacks but have a similarly significant impact on enterprises' operations. As clearly elucidated by the Crowdstrike outage, the consequences can be severe. Because of this, the question arises-can cyber insurance help cover companies in such situations?

UNDERSTANDING THE OUTAGE

It is important to understand why cyber insurance is not a blanket answer and why the Crowdstrike outage happened. Put simply, the maintenance software update in question was a regular update called 'sensor configuration update This update is regularly issued to an enterprise endpoint security platform, Crowdstrike Falcon.

Falcon is used in a wide range of industries, including aviation, healthcare, banking and financial services, and more. In this particular case, the sensor configuration update was being rolled out to devices running the Microsoft Windows operating system for enterprises, and the update in question was to 'channel file 291-which is not applicable to devices running on either Linux or Apple's macOS computing platforms.

The faulty update file crashed devices running on Windows, supported by the Crowdstrike Falcon enterprise security product. This, in turn, led to devices failing to boot and rendered what is called a 'blue screen of death', or the infamous BSOD.

This story is from the August 2024 edition of Voice and Data.

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This story is from the August 2024 edition of Voice and Data.

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