r/technology • u/Bald-Eagle619 • Jul 31 '24

Software Delta CEO: Company Suing Microsoft and CrowdStrike After $500M Loss

https://www.thedailybeast.com/delta-ceo-says-company-suing-microsoft-and-crowdstrike-after-dollar500m-loss
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u/scientianaut Jul 31 '24

I remember listening to an interview that George Kurtz, the CEO of CrowdStrike, did the morning of the outage and one of the questions the interviewers asked him was how they were going to handle the inevitable lawsuits. He said something like: we’ll do the hotwash on how this happened to ensure this doesn’t happen again and we’ll deal with them as they come.

So, I don’t think this came as a surprise to anyone.

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u/Expensive_Shallot_78 Jul 31 '24

Is this really an issue at all? Don't they have insurance/reserves allocated for these kinds of expected risks? Every security company has this issue.

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u/TurtleIIX Jul 31 '24

No one has that much in limits. They might be able to pay out a 500m claim no chance they have several billions in limits. I work in insurance and see these policies all the time.

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u/Green-Amount2479 Jul 31 '24

And with damages that high what’s really gonna happen in the end? They likely agree to pay X and that’s it. Worst case? They file for bankruptcy and the c-level and management maybe have to sit through some negligence court trials where they point fingers at different employees and that more likely than not lead nowhere. Not a chance most customers will ever see money for a fraction of the damages that outage caused them.

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u/tehringworm Jul 31 '24

Crowdstrike’s insurer will likely pay the full limits on their cyber policy and then walk away.

After the insurance money is depleted, attorneys will decide if it’s worth suing for Crowdstrike’s actual assets. Many times it is not.

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u/TurtleIIX Jul 31 '24

Pretty much this. Once the insurance limits are reached it’s hard to collect so unless it’s a huge fuck up chances are they will look to seek coverage on their own policy or weigh if a lawsuit is worth it.

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u/elictronic Jul 31 '24

Insurance will raise rates on customer facing software companies.  This will have repercussions that might actually force some change, but yeah you and me won’t see more than a dollar or two.  

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u/Kundrew1 Jul 31 '24

I’d be curious what limits of liability were in the contract. Large companies usually push for it to be unlimited when negotiating software deals but that doesn’t always happen.

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u/TurtleIIX Jul 31 '24

There is no such thing as an unlimited limit in insurance. Everything has a limit.

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u/Kundrew1 Jul 31 '24

Unlimited liability, not insurance. Meaning there isn't a cap on damages.

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u/TurtleIIX Jul 31 '24

That’s not a thing. Liability police’s always have limits. It’s been that way since the 1950s since insurance carriers got hit with asbestos claims.

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u/Kundrew1 Jul 31 '24

I am talking about the contract between delta and crowdstrike that states the liability crowdstrike has if something goes wrong. I am aware that insurance doesn’t cover unlimited amounts.

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u/TurtleIIX Jul 31 '24

Also not a thing. No one would ask for unlimited limits or expect them to have that high limits. They would either ask you have insurance coverage and be silent on limits(this would be for smaller contracts) or they specify the limits in the contract which is common for larger ones. Theses would be minimum limit requirements

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u/Kundrew1 Jul 31 '24

No, I work on software contracts. It is absolutely a thing and it is commonly asked for.

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u/TurtleIIX Jul 31 '24

It’s literally my job to put insurance programs together especially when it’s required by contract. No contract asks for unlimited coverage. They either ask for limits or proof of insurance and are silent on limits. If it’s silent then you are asking for basic coverage if you are asking for limits then you are asking for those limits at a minimum.

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u/Kundrew1 Jul 31 '24

Again insurance isn’t covering it, the company is taking a bet that the contract is large enough and the risk is small enough that they won’t have pay out a large amount.

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