02:17 PM EDT, 07/30/2024 (MT Newswires) -- CrowdStrike's ( CRWD ) user agreements largely keep it safe from revenue loss recovery and limit damages, but government contracts might pose higher liability risks from the July 19 technology outage, Wedbush said in a note Tuesday.

Losses from the outage are estimated at $5 billion to $6 billion for top US companies and $7 billion to $8 billion globally. While most CrowdStrike ( CRWD ) customers are expected to have cyber insurance, coverage is likely limited to 10% to 20% of the total losses, Wedbush said, based on its conversations with experts on the matter.

The company's errors and omissions insurance is unlikely to cover all potential damages, especially if claims exceed the coverage limit, Wedbush added.

The firm said public sector or federal customer agreements are generally less restrictive and can potentially lead to higher liability and claims under statutes like the False Claims Act.

CrowdStrike's ( CRWD ) customers impacted by the incident are required to file an 8-K within four days, but so far the brokerage has not seen any such filings.

Wedbush has an outperform rating and a $315 price target for CrowdStrike's ( CRWD ). Shares were down over 11% in recent trading.

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