Learning from the CrowdStrike Outage: Why Small Businesses Need Cyber Insurance

The CrowdStrike Outage: A Wake-Up Call for Businesses 

In August 2024, CrowdStrike, a leading cybersecurity firm, experienced a significant outage that disrupted operations for countless businesses worldwide. A faulty security update grounded planes, took banks offline, and interfered with 911 services. Even companies not using CrowdStrike were affected if they relied on tools or inventory from those who do. This incident highlighted the risks of relying on a few major service providers—when one fails, the ripple effects can be devastating. 

Consequences of Cyber Incidents Like the CrowdStrike Outage

The CrowdStrike outage highlights how cyberattacks or technical glitches can significantly disrupt business operations and financial stability. Without the right protections in place, businesses may face severe consequences when providers fail like: 

• Loss of Income: According to an impact analysis of the CrowdStrike outage, Fortune 500 companies alone lost an estimated $5.4 billion.

• Increased Costs: Businesses often face unexpected costs when trying to find quick solutions, like paying for couriers to deliver what are usually digital documents or covering overtime for employees. These additional expenses can add up quickly during a crisis.

• Reputation Damage: Delta Air Lines lost $500 million during the outage, but the hit to its reputation could be even more costly. Customer complaints about the airline’s response led the Department of Transportation to open an investigation into how Delta handled the crisis.

• Recovery Costs: Businesses face additional costs related to recovery, including IT support, data recovery, and public relations efforts. According to a study by J. Gold Associates, remediation costs from the incident may exceed $700 million. 

Cyberboxx Business 5.0: Complete Cyber Protection 

To help businesses manage the risks of cyber incidents like the CrowdStrike outage, BOXX’s Cyberboxx Business 5.0 is designed to protect businesses when things go wrong.  

BOXX clients have reassurance in a situation like this as their Cyberboxx Business 5.0 policy covers: 

Business Interruption from System Failures: 

• Reimburses lost income if your systems go down. 
• Covers extra costs, like paying overtime or finding quick workarounds. 
• Includes PR support to manage your business’s reputation during a crisis. 
• Covers hiring experts to figure out the financial impact and get you back on track. 

Disruptions from Outsourced Providers: 

• Covers losses if your business is disrupted by a cyberattack or issue with an outside service provider. 
• Pays for data recovery to get you back up and running.  
• Covers costs to restore your access to the provider’s systems. 

Prepare for Future Cyber Threats with Comprehensive Insurance 

The CrowdStrike outage taught us an important lesson: businesses need to be proactive about future cyber threats. Cyberboxx Business offers more than just coverage for downtime and data recovery. It also includes: 

24/7 Breach Response Services: Get immediate help from the Hackbusters™ team when a cyber incident occurs. 

Virtual Chief Information Officer (vCISO) Services: Enterprise grade expertise and solutions to protect your business from cyber threats and crimes. 

Employee Training and Education: Equip your team with the knowledge to prevent cyber-attacks before they happen.