Does cyber insurance cover non-malicious system failures like CrowdStrike?

It depends entirely on your policy language. Policies with "system failure" coverage typically respond; those limiting coverage to "security failures" or "malicious events only" may not. Review your specific policy definitions with your broker.

What's the difference between direct and contingent business interruption?

Direct business interruption covers losses when YOUR systems fail. Contingent (or dependent) business interruption covers losses when a VENDOR's systems fail, causing your business disruption. The CrowdStrike event demonstrates why contingent coverage is essential.

How long do I have to report a potential claim?

Most cyber policies require notification within 24-72 hours of discovering an incident. Some use language like "as soon as practicable." According to cyber insurance claims data , late reporting is the #1 reason for claim denials. When in doubt, report immediately, you can always withdraw the claim later.

If my systems were down for 10 hours but my policy has a 12-hour deductible, do I get partial coverage?

No. Time deductibles work differently than dollar deductibles. You must exceed the full waiting period before ANY coverage activates. A 10-hour outage with a 12-hour deductible results in zero payment, regardless of loss size.

Can I still make a claim if the outage happened months ago?

Policy notification requirements typically mandate "prompt" or "timely" reporting. While you may still be able to file a claim, expect significant scrutiny and potential coverage issues if you delayed notification without good cause. Review your specific policy deadlines immediately.

Should I increase my cyber insurance limits after the CrowdStrike event?

The average cyber insurance claim for SMEs is $345,000 , with some events exceeding $1 million. If you're carrying $1M limits, consider increasing to $2-3M. The incremental cost is often surprisingly affordable, and system failure events can generate unexpectedly large business interruption claims.

What if I don't have cyber insurance, will my property policy respond?

Unlikely. Most property policies now include cyber exclusions. However, older policies may contain "silent cyber" coverage. Have your broker review your property policy for cyber exclusion language and business interruption trigger definitions. Don't rely on property coverage for cyber events going forward.

How will the CrowdStrike event affect cyber insurance renewals?

Expect insurers to ask more detailed questions about vendor dependencies, update management procedures, and business continuity planning. Policies may add system failure sublimits or tighten dependent business interruption language. Work with your broker 60-90 days before renewal to address any coverage gaps.

Author: Gordon Coyle

Gordon B. Coyle, CPCU, ARM, AMIM, PWCA, is the CEO of The Coyle Group and brings more than 40 years of experience in commercial insurance and risk management. He helps business owners evaluate risk, improve coverage clarity, and structure commercial insurance programs aligned with their operations. His expertise includes business insurance strategy, risk management, and complex coverages such as cyber liability, directors and officers liability, workers’ compensation, and industry-specific insurance solutions for growing companies across the United States.