Lessons from CrowdStrike Global Meltdown
On July 19th, 2024, a security update from CrowdStrike caused one of the biggest global IT outages in history. Crippling over 8.5 million devices, it triggered chaos across industries all over the world including Australia, from airports and banks to supermarkets and healthcare systems.
While the issue was swiftly traced to a faulty software update, and almost completely recovered within 24 hours, the event exposed deep vulnerabilities in the world's technology infrastructure. It underscored the critical importance of robust cybersecurity, well-planned contingencies, and cyber insurance to shield businesses when things go wrong.
Interconnected vulnerabilities in modern business
CrowdStrike provides endpoint security and threat detection to 30,000 companies worldwide. It runs operations on Windows, the most used operating system across the globe. When both systems failed, it resulted in widespread operational disruption, causing one of the largest technology disruptions to date. In Australia alone, the impact on businesses has been estimated at more than $1 billion. The event serves as a reminder that businesses cannot rely on cybersecurity alone. Resilience depends on a combination of redundancy, diversification, and preparation for the failure of even trusted providers.
Do you have a disaster recovery plan in place?
During the CrowdStrike outage, many businesses struggled with internal and external communication, as systems remained offline or experienced slow recovery times. Companies that struggled most were those overly reliant on a single technology without a backup plan. This is why a good disaster recovery plan and a well-developed business continuity plan are critical during a crisis. Businesses should evaluate, update and test their business continuity and disaster recovery plans regularly.
[Read: "Could your business survive a cyber attack?"]
The benefits of training and testing
Even when third-party platforms experience an outage, businesses can mitigate risks by ensuring that employees are well-versed in cybersecurity best practices. Training employees to recognise phishing attempts, malware, and other threats can reduce the likelihood of a successful attack during an outage when systems may be more vulnerable.
Regularly conducting stress tests on their cybersecurity infrastructure and simulating incident response scenarios can also prepare organisations for real-world disruptions.
Cyber insurance provides more than just financial protection
One of the most important considerations for businesses in the wake of the CrowdStrike outage is the role of cyber insurance. While cyber insurance cannot prevent an outage from occurring, it can provide crucial financial support in mitigating the consequences of such an event. More than that, comprehensive cyber insurance policies provide expert response services, a standout feature for smaller businesses lacking in their own cybersecurity teams. These services help manage the complexities of a cyberattack, enabling faster recovery and reducing costs. Additionally, some policies offer 'Active Insurance,' which leverages cutting-edge cybersecurity tools and around-the-clock specialists to monitor, detect, and neutralise cyber threats proactively.
[Read: "Top 5 reasons businesses need cyber insurance"]
As businesses become increasingly reliant on technology, the risk of IT outages grow, not only in frequency but in the size of their impact. It's clear that preparing for cyber incidents is essential for ensuring resilience in the face of inevitable disruptions, through both enhanced security protocols and the financial safety net of cyber insurance.
How Coverforce can help
Our expert insurance brokers are here to help. They will evaluate your business's unique cyber insurance requirements and provide you with the most cost-effective coverage options from our broad network of insurers. In the event of a claim, we act on your behalf, working closely with the insurer to ensure you receive the full benefits you're entitled to under your policy. To learn more about our Cyber Insurance solutions, or to request a no-obligation quote, reach out to our dedicated team at your nearest Coverforce office.
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