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Businesses Demand Higher Compensation From The Roger outage: Will They Buy Insurance?

Last Friday, more than 10 million Canadians across the country woke up to a nationwide Rogers network outage that left many without cell service, scrabbling for an internet connection and unable to make purchases with their bank cards.

Rogers is going to compensate the subscribers for “equivalent to two days of service”, in a case of an $85/month wireless plan, that works out to about $5.50.

Would this be sufficient to cover the actual losses?

  • Small business owners were unable to process online orders, use food delivery apps and even process debit or credit card transactions because Interac was using Rogers. Because they lost thousands of dollars they would like to see a free month of Rogers service to make up for the losses that came just as companies were trying to recover from the COVID-19 pandemic.
  • Airlines got hit. On Sunday, 53 percent of flights out of Pearson were delayed. Over 40 percent of flights were delayed out of Montreal and Vancouver airports. Customers went angry and demand now compensation from their airlines.
  • Massive headaches for retailers around Calgary on the first official day of the Stampede, “mostly with our bank machines and point-of-sale machines in our venues and among our vendors”, reads a statement from the Calgary Stampede. After a day of interruption they switched the services to an alternative provider causing huge business losses.
  • Even large corporations like Walmart and McDonald’s were left without the ability to serve customers with debit.
  • People were not able to access their Tesla’s and other connected cars as the uplink went down. In a world with autonomous vehicles cars would have automatically stopped as they require connectivity 24/7. Cars would require connectivity to operate normally, but “there will be enough redundancy in system to ensure connectivity all the time.” - Steven Waslander

Ken Whitehurst, Executive Director of the Consumers Council of Canada, believes Rogers’ approach towards compensation is the “easiest and fairest” way in which they can provide redress to consumers “based on the loss of services.”

Insurance will play a pivotal role during the next years for adding an additional protection layer for business interruption losses due to technological glitches.

It’s a matter of time until we will the demand will be met by insurers.