Microsoft outage could generate $700 million in insured losses: Kovrr

Kovrr, a co-founder and chief product officer, has estimated that insured losses from the Microsoft 365 and Exchange Online outage could reach $700 million. The financial range provided by Bublil spans from $300 million to $1.4 billion, based on lost productivity and other factors. The outage, which began on Thursday at 1617 GMT, is expected to conclude by 1900 GMT on Friday.

The estimate takes into account economic losses of around $16 billion, with the difference between the economic and insured loss figures attributed to limited coverage for non-malicious failures at technology providers and low cyber insurance uptake among small businesses. The severity of the outage is considered the most sensitive assumption in this estimation, while longer disruption during US business hours would further increase insured losses.

Microsoft reported on Friday that they were still recovering across affected regions, although some users experienced intermittent issues or delayed email. The company stated there was no evidence of malicious activity. It remains to be seen whether affected companies have business interruption cover for accidental failures at technology providers and can demonstrate financial losses.

Some cyber brokers note that SME policies may require a security failure or cyberattack before coverage responds, while others extend business interruption protection to non-malicious system failures. Depending on the policy, customers must establish if dependent business interruption provisions apply to failures at outside technology providers.