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Delta Airlines Seeking Damages Over Microsoft CrowdStrike System Outage
Delta Airlines plans to seek millions of dollars in damages from Microsoft and CrowdStrike over a software outage which occurred on July 19, 2024. The airline is pursuing damages for an estimated $300 to $500 million for over 7,000 canceled flights, service failures, and other losses. Delta currently faces over 176,000 refund or reimbursement requests from ticketholders stranded after the crash. Parametrix Insurance estimates the outage caused Fortune 500 companies a total loss of $5.4 billion, excluding Microsoft.
Millions of Microsoft system-operated computers crashed worldwide during the outage, affecting flights, international stock exchanges, medical and pharmaceutical facilities, and other public and retail services.
CrowdStrike, the global cybersecurity firm supplying antivirus software for Microsoft Windows devices, claimed responsibility. The corporation reported that the crash stemmed from a technical problem within the software and was not the work of hackers or terrorist activity. No information was stolen during the event. CrowdStrike lost nearly a quarter in value immediately following the event, and shares fell another five percent after it was publicized that Delta had hired David Boies, a prominent attorney.
Determining the total amount of loss is expected to be a lengthy process as language in cyber insurance policies is not standardized, and it is not yet known whether all customers will in fact be covered. The majority of Policyholders will likely file “business interruption” claims, the primary type of loss from cyber incidents typically covered in insurance policies.
As these outage losses were not caused by a cyberattack, many companies will likely file “systems failure” claims, which is still emerging as standard coverage. However, not all systems-failure coverage applies, and non-malicious event clauses or loss thresholds could prevent certain companies from recovering damages.
Herold Law, P.A. is a full-service law firm located in Warren, New Jersey. To learn more about our legal services or to schedule a consultation, please call 908-679-5011 or contact us online. We also serve clients in Somerville, Morristown, and across New Jersey.
