Microsoft’s Outage Has a Cost. Cyber Insurers Will Pay It

By Jim Nelson On November 14, 202608:00 AM Eastern

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Microsoft’s Outage Has a Cost. Cyber Insurers Will Pay It

Key Takeaways

Microsoft’s outage cost millions of dollars.
Insurers are the ones to pay the bill.
Here are 12 articles for you to read this weekend.

By Jim Nelson
Reviewed by: Dawn Pennington

More than 450 million paid Microsoft 365 commercial subscriptions ran into problems this week. Yet it will only cost insurers about $1 per account.

If you use any Microsoft (MSFT, “B-”) products, like we do here at Weiss, you might have already run into a few problems. Hopefully, they have since been sorted out.

We couldn’t access our email, had trouble messaging each other on Teams and even ran into problems with Word documents and Excel spreadsheets.

This happened worldwide, with Europe and Asia coming slowly back online about 24 hours after the “intermittent access issues” started, according to Associated Press.

Source: AP.

As you’d expect, there is a financial cost to failing on such a level. But, as you might also expect, it isn’t as much as it should have been.

The Wall Street Journal reported yesterday that insurers expect to pay between $300 million and $500 million due to this incident.

Cyber insurance policies often don’t cover interruptions unless they are caused by attacks, which this one apparently wasn’t.

To put that in perspective, Microsoft’s Cloud business — which houses its 365 commercial operations — brought in $63.9 billion in just the most recent quarter.

So, despite bringing other businesses around the globe to their knees for at least a few hours if not days, it could cover the cost 160 times over with just three months of sales.

Of course, it won’t even pay that. Insurers will.

This isn’t the worst one cyber insurers have had to cover. That would go to the CrowdStrike (CRWD, “C”) outage last year. Estimates for that go as high as $1.5 billion.

Again, a drop in the bucket compared to how much revenue these products bring in.

Still, there are workarounds, as we learned to use here at Weiss Ratings Daily.

That’s why there was no slowdown in the expert advice we sent you this week …

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