Who will be compensated for CrowdStrike outage?

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CrowdStrike would hardly have been a name familiar to most Australians last Friday morning, but by the end of the day the American cybersecurity firm was dominating headlines after a software update error wreaked havoc around the world.

As millions of computers became victims of the so-called 'blue screen of death', individuals and companies across the country began to feel the impacts of the outage which touched everything from airlines and supermarkets to banks and media organisations.

While the chaos witnessed on Friday is over, Home Affairs Minister Clare O'Neill told the ABC yesterday morning that issues caused by the outage could linger for another week or two.

crowdstrike outage compensation

Given how widespread the outage was, it's unsurprising that the event has raised plenty of questions, including from individuals and businesses who were financially affected. Here are five major questions which have emerged following the outage.

Can travellers recoup costs from the CrowdStrike outage?

Among the groups most impacted by the outage were travellers, as airlines operating in Australia and overseas were forced to delay or cancel flights.

While frustrating, the good news for travellers with insurance who were impacted by the CrowdStrike outage is that they should be covered for expenses incurred as a result of delays.

"Travel disruption cover is a feature of most policies and can reimburse you for unexpected additional expenses (such as taxis to and from the airport) or cancellation fees if you can't make the trip at all," explains Angus Kidman, a personal finance and travel expert at Finder.

"How much you'll get will vary depending on your policy. But if you've ended up out of pocket and have travel insurance, it's definitely worth a call to your insurer to make a claim."

Kidman says that those without travel insurance looking to their airline for compensation are unlikely to have much luck though.

"Unfortunately, airlines aren't going to offer any additional compensation. If they absolutely can't provide the flight service you paid for, they might give you a refund - but most will try and shift you to an alternative flight, even if that's days later, and will point out that their terms don't guarantee you'll be on a specific service at a specific time."

Will affected businesses be compensated?

The exact extent of the financial loss suffered by Australian businesses is still unknown, but at a press conference on Sunday Andrew McKellar, the chief executive of the Australian Chamber of Commerce and Industry, said that the outage will have had a "major impact".

So will businesses who lost revenue as a direct result of the outage be entitled to any compensation down the track? McKellar thinks it unlikely.

"I think for many businesses it's going to be very difficult to secure direct compensation, but obviously that's something that should be looked at and I think if there are ways to consider how that might be evaluated, then obviously that's something that should be on."

McKellar says that insured businesses may be able to make a claim, though he also noted that the event serves as a reminder of the benefits of business continuity insurance in helping businesses mitigate risk.

"It's a world where there are increased levels of interconnectedness and there are layered levels of risk as well. So I think that's why keeping an awareness of all the options that we have, including insurance, is very important for business and for small business."

Does the outage reinforce the importance of cash?

The issues that the likes of supermarkets, petrol stations and other retail outlets ran into as a result of the CrowdStrike outage aren't - broadly - a new phenomenon, as payment outages have become a semi-regular occurrence.

Typically these outages affect those paying by card, which is the situation some shoppers found themselves in on Friday when they were told that cash was the only payment option left available.

Kidman says this gives weight to the idea that even holding a bit of cash can hand be useful as a backup, even if it's not the preferred payment method for many Australians these days.

"Carrying a little emergency cash is always a wise idea, but we've already shifted away from cash being the main form of payment. Finder research found 42% of Australians use cash less than once a month and RBA data shows just 8% of transactions by value are made with cash."

As Kidman notes though, even cash won't to do the job in every situation - as some people found out last Friday when cash registers and stores themselves were closed as a result of the outage.

"Having cash doesn't guarantee people will be able to spend it: if IT woes mean businesses can't open the cash register, you're still stuck."

What has happened to the CrowdStrike share price?

Given that CrowdStrike has become a household name overnight for all the wrong reasons, it's hardly a surprise that its share price has taken a pummelling since the outage.

"Following the outage report, the CrowdStrike stock experienced an immediate 12% decline at the pre-market open, with continued pressure driving it down to nearly US$270," explains Junvum Kim, Saxo Asia Pacific senior sales trader.

"The immediate fallout from the CrowdStrike incident includes significant disruptions and reputational damage, likely resulting in broker downgrades and heightened volatility."

Some of CrowdStrike's competitors appear to have initially benefited from the situation, though Kim thinks that the outage is likely to raise wider questions about the cybersecurity sector among investors.

"Rivals like SentinelOne and Palo Alto Networks saw gains following CrowdStrike's disaster. However, exposed vulnerabilities may trigger broader market concerns and increased regulatory scrutiny, requiring enhanced quality assurance. This could impact operational flexibility and raise costs for cybersecurity firms."

Do Aussies need to be alert to CrowdStrike-related scams?

Yes, is straightforward answer.

Less than 24 hours after the outage began the Australian Competition and Consumer Commission (ACCC) was already warning consumers and small businesses about the likelihood that scammers would look to exploit the situation to gain access to people's computers.

The watchdog said that people should be on guard for unsolicited calls, emails or messages requesting remote access to computers or offering new software to download.

"Criminals look to take advantage of incidents like this CrowdStrike outage, creating a sense of urgency that you need to do what they say to protect your computer and your financial information," says Catriona Lowe, the ACCC's Deputy Chair.

"Anyone can be scammed, so it is important to be wary of any unsolicited contact that purports to provide assistance in the aftermath of a major event like this."

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Tom Watson is a senior journalist at Money magazine, and one of the hosts of the Friends With Money podcast. He's previously worked as a journalist covering everything from property and consumer banking to financial technology. Tom has a Bachelor of Communication (Journalism) from the University of Technology, Sydney.