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July 29, 2024
CrowdStrike losses may be biggest test yet of cybersecurity insurance risk warning from Warren Buffett
NBC News
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Contributed by: Drex DeFord
Summary
Warren Buffett's Berkshire Hathaway expressed caution at its annual investor meeting about cyber insurance, advising agents to sell such policies only when necessary due to the unpredictable scale of potential losses. This caution was underscored by a recent global IT outage caused by a CrowdStrike quality control issue, which affected various sectors including transportation and healthcare. While some experts like Gerald Glombicki of Fitch Ratings believe that the industry has largely priced in such risks and can manage the losses, others such as Josephine Wolff of Tufts University foresee significant business interruption claims and potential litigation arising from such incidents. The episode highlights the complexities and evolving nature of the cyber insurance market, emphasizing the need for better risk assessment and potentially more standardized policies.
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