CHICAGO— Homesite Insurance Company has asked a federal court to declare that it has no obligation to cover a business interruption claim filed by United Airlines (UA) following the global CrowdStrike software outage that disrupted operations in July 2024.
The lawsuit, filed in the U.S. District Court for the Northern District of Illinois, centers on whether the airline’s claimed losses qualify for reimbursement under its cyber insurance program.
The dispute stems from the widespread technology failure triggered by a faulty CrowdStrike Falcon software update on July 19, 2024, which temporarily disabled critical computer systems across multiple industries, including aviation.
United Airlines (UA), headquartered in Chicago and operating from Chicago O’Hare International Airport (ORD), says the outage caused significant operational disruption, while Homesite argues that the carrier’s insurance claim falls outside the policy’s coverage.
Coverage Dispute Over Claims
According to the complaint filed on July 20, 2026, Homesite provides excess coverage within United’s cyber insurance program. The insurer’s follow-form policy carries a $5 million limit and covers half of a $10 million insurance layer above $45 million.
The policy follows a primary cyber insurance policy issued by Lexington Insurance Company, which provides a $15 million limit with a $50 million retention that United must absorb before coverage applies.
Homesite contends that United’s claim does not meet the conditions required for payment under the policy.
The insurer alleges that the airline has already recovered some outage-related losses from third parties but improperly counted those recoveries toward satisfying its $50 million retention instead of reducing the overall claim amount, Insurance Business reported.
The complaint argues that the insurance contract explicitly prevents payment for losses that an insured party has already recovered from another source. Homesite therefore seeks a court declaration confirming that it has no obligation to contribute toward United’s claimed losses.
Claims Under Review By Court
The lawsuit identifies two major areas of disagreement between the airline and its insurer.
The first involves passenger compensation issued during the outage.
United reportedly provided electronic travel certificates, cash reimbursements, hotel accommodations, meals, ground transportation, frequent-flyer mileage, and limited onboard food and beverage compensation to affected travelers.
United argues these expenses qualify as covered passenger compensation because they were required under applicable laws and regulations.
Homesite disputes that position, alleging United has not identified any specific legal requirement that obligated the airline to provide many of those benefits. The insurer also claims several goodwill payments were made without obtaining the insurer’s required written approval.
The second dispute concerns downstream revenue losses. Homesite alleges United sought compensation for revenue from later flight segments that operated normally after systems had been restored.
According to the complaint, the airline relied on a valuation method intended for canceled flights without validating those calculations against actual operating data.
Industry Implications For Insurers
The case highlights several issues that continue to shape cyber insurance claims across the aviation industry.
These include how insurers treat third-party recoveries, whether customer goodwill payments qualify as covered losses, and the level of documentation required to support large business interruption claims.
Homesite also alleges that United failed to provide the final report prepared by the approved forensic accountant responsible for measuring the airline’s financial losses. The insurer argues that the missing documentation further limits its obligation under the policy.
The allegations remain unproven, and the court has not issued any ruling on the merits of either party’s claims.
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