Email Out, Business Out: A Three-Day Outage Could Cost Billions

Gmail, the world’s largest email service, went down in January, March, April and twice in June. A couple of these outages were global.

TalkTalk’s email service was out in the UK in May and again earlier this month. And even as we speak, Verizon’s internet service is down in the Northeastern U.S.

What does it all mean? Plenty, judging by Counting the Cost Of a Major Email Service Provider Outage In The UK, a study released last week by risk-modeling company Kovrr.

None of the above outages resulted from a cyber attack, as far as anyone knows. But such an incident could pose “a potentially disastrous risk to the availability of this essential service” and surpass the impact of a flood or other natural disasters covered by property insurance, the study notes.

Why so risky? Only “a small number of email service providers (such as Microsoft, Google, and Rackspace) that account for the majority of all emails sent,” it says. “This presents a potentially disastrous risk to the availability of this essential service if one was to suffer an outage as the result of a cyber-attack," the study adds.  

What will it cost?

The analysis shows that 47% of businesses in the UK use “one vendor in particular.” The vendor is not named. But an outage would provide “an excellent example on which to model the potential implications of a cyber catastrophe targeting such a crucial platform,” the study states.

The study estimates that “the economic loss estimate for the cyber event within a three-day email service outage or the entire active companies in the UK” would be U.S. $44 billion. 

However, the "economic impact of the event," the “ground up loss,” is seen as $4.9.billion.

And the gross insured loss -- a figured determined by "taking into account insurance adoption rates as well as the terms, conditions and average waiting periods before business interpretation coverage is activated" -- is $3.25 billion. 

This covers only the UK, but marketers can scale the impact of an outage in the U.S. 

The report notes that 290 billion email messages are sent per day worldwide by 3.9 billion users, “facilitating a $15 trillion global economy comprised of over 150 million organizations."

The gap between the insured loss and the economic loss may be an opportunity for insurance companies. But a cyber event could “trigger business interruption claims.” And it’s not clear where it would go from there.  



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