Nature Of Accumulation Risks: Lessons from the Asus Router Outage
If you’re an insurance executive, you know that the tech industry is a high-risk sector. From cyber attacks to hardware malfunctions, tech companies face a wide range of threats that can disrupt their operations and damage their bottom line. That’s why it’s crucial for tech companies to have insurance coverage that can protect them from these risks. However, as the recent Asus router outage shows, traditional insurance policies may not always be enough.
On Wednesday, Asus router users around the world reported that their devices suddenly froze up for no apparent reason and then, upon rebooting repeatedly, stopped working every few minutes as device memory became exhausted. Two days later, the Taiwan-based hardware maker finally answered the calls for help. The mass outage, the company said, was the result of “an error in the configuration of our server settings file.” After fixing the glitch, most users needed to only reboot their devices. In the event that didn’t fix the problem, the company’s support team advised users to save their current configuration settings and perform a factory reset. The company also apologized.
It was a frustrating two days for many users as they attempted to troubleshoot the outage. Asus’ silence during that time only added to the frustration. “This is a bunch of BS. Why doesn’t Asus put out some kind of statement explaining what’s going on?” one user complained.
Asus still hasn’t provided details about the configuration error. Various users have offered explanations online that appear to be correct. “On the 16th, Asus pushed a corrupted definition file for ASD, a built-in security daemon present in a wide range of their routers,” one person wrote. “As routers automatically updated and fetched the corrupted definition file, they started running out of filesystem space and memory and crashing.”
The long and short of things is that the 48-hour mystery surrounding the malfunctioning Asus routers has now been solved and a fix is in place. However, this incident highlights the need for tech companies to have insurance coverage that can protect them from similar events in the future.
Here are some common misconceptions about insurance coverage for tech companies and what to do instead:
“My traditional insurance policy covers all types of risks.”
Traditional insurance policies may not cover all types of risks that tech companies face. For example, in the case of the Asus router outage, it’s unlikely that a traditional insurance policy would have covered the costs of lost revenue, reputational damage, and customer support. That’s why it’s important for tech companies to consider parametric insurance, which can provide coverage for specific risks that traditional policies may not cover.
“I don’t need insurance coverage for hardware malfunctions.”
Hardware malfunctions can be costly for tech companies, especially if they result in downtime or lost data. That’s why it’s important to have insurance coverage that can protect against these risks. Parametric insurance can provide coverage for hardware malfunctions, as well as other types of risks that tech companies face.
“I can’t afford insurance coverage for all types of risks.”
Insurance coverage can be expensive, but it’s important to consider the costs of not having coverage. In the case of the Asus router outage, the costs of lost revenue, reputational damage, and customer support could far outweigh the costs of insurance coverage. That’s why it’s important to work with an insurance provider that can tailor coverage to your specific needs and budget.
In conclusion, the Asus router outage serves as a reminder of the importance of insurance coverage for tech companies. Traditional insurance policies may not always be enough to protect against the specific risks that tech companies face. That’s why it’s important to consider parametric insurance, which can provide coverage for specific risks and help tech companies get back on their feet after a disruption. With Riskwolf, you can turn real-time data into insurance. Using unique real-time data and dynamic risk modelling, we enable insurers to build and operate parametric insurance at scale. Simple. Reliable. Fast. Contact us today to learn more. And for more information on the Asus router outage, check out Ars Technica.