United Airlines is suing cyber insurer Homesite, saying it refused to pay a $5 million claim from the 2024 CrowdStrike outage.
United Airlines Holdings has taken Homesite Insurance Company to federal court in Chicago over losses from the July 19, 2024 CrowdStrike outage. The complaint, filed July 21, 2026 in the Northern District of Illinois, brings claims for breach of contract and bad faith.
According to the filing, a "defective software update" from the security vendor CrowdStrike crashed millions of Windows systems worldwide and disrupted parts of United's operations. CrowdStrike is not a defendant in the case. United says the outage forced it to cancel more than 1,600 flights - about 12 percent of its schedule - and left more than 200,000 passengers stranded during one of the busiest travel weekends of the summer.
The contested amount is only part of United's total loss. The airline puts its total covered loss at $113,670,277 but says only one piece is disputed: $20,423,430 in passenger compensation, covering the meals, hotels, ground transportation, cash reimbursements and travel credits it provided to stranded travelers.
United says those payments were legally required. The complaint states that the US Department of Transportation directed the airline to care for its passengers and warned that failing to do so could bring civil penalties of $75,000 per violation. Across 1,600 cancelled flights, United says, that exposure reached into the hundreds of millions, if not billions.
United's coverage was arranged in layers. According to the complaint, the airline held up to $200 million in cyber coverage above a $50 million self-insured retention. It says seven insurers across six layers - starting with AIG at the primary level - reviewed the same loss, applied the same policy language and paid their full limits.
Homesite sits in the fourth excess layer, which it shares with Indian Harbor Insurance Company on a 50/50 basis. United says Indian Harbor, on identical terms, paid its 50 percent share up to its full $5 million limit, while Homesite refused to pay its half.
Much of the dispute centers on one endorsement. United points to the Civil Aviation Endorsement in the underlying AIG policy, which the Homesite policy follows. According to the complaint, it expanded the definition of "Loss" to include "any Civil Aviation Fines or Passenger Compensation that the Insured is legally liable to pay in respect of a Flight Cancellation or Delay," and defined "Civil Aviation Law" to reference "14 CFR Part 259 (US)" - the federal rule United says required the payments.
United alleges Homesite rejected that reading. The complaint says Homesite described the passenger payments as "voluntary," "discretionary" and "gestures of goodwill," and as "discretionary payments made to appease customer dissatisfaction." United also says Homesite argued the airline should have obtained the insurer's "prior written consent" before making the payments.
A second issue concerns the self-insured retention. United says the policy allows money it recovered as an additional insured under other parties' policies to reduce the $50 million retention. According to the filing, Homesite reads the language differently.
United describes the denial as bad faith. The complaint calls Homesite's positions "pretextual and meritless" and its conduct "vexatious and unreasonable" under Illinois law. The airline is seeking the unpaid $5 million, attorneys' fees and costs, and penalties under 215 ILCS 5/155, an Illinois statute addressing unreasonable claim denials. It has requested a jury trial.
The allegations have not been tested, and no court has ruled on the claims.
