Just released: How to raise venture capital in 2023

Download

The 2013 Target Data Breach: Insurance Coverage Recap

Carl Niedbala - Founder Shield
Carl Niedbala

COO & Co-Founder

Retail Giant Target was hit with a massive data breach incident during the holiday season of 2013.  We posted a few articles outlining the severity of the breach and speculating on how cyber insurance may be their lifeline.  Here’s a quick follow up on the claims the company has seen since the incident.

VentureBeat recently reported that Target is primed to pay “up to $1oM” to customers that had their credit card information stolen.  While it’s likely a welcome relief for those customers effected by the breach, it’s far from the full story.  A report released by insurance research firm Advisen shows that this payout is just the tip of the iceberg for the retail giant.

In fact, Target’s costs related to the data breach have reached $252M in total, of which $90M has been covered by cyber insurance.  This is because the costs related to a data breach (and covered by cyber liability insurance) far exceed those of a settlement with effected customers.   Those costs include:

  • Defending various lawsuits from banks and customers alike
  • Forensic / investigative costs to determine the cause of the breach
  • Data and network infrastructure restoration and costs
  • Compliance with breach notification laws
  • Business interruption costs for downtime while fixing the POS systems
  • Hiring marketing/PR firms to repair the reputational damage from such a disaster

In fact, Advisen’s research has revealed that the Target data breach was the largest data breach incident in the last 8 years.  Keep in mind that the claims are still rolling in!  Though the company still had to pay over $160M out of pocket, cyber insurance kicked in to cover a sizable portion of each of the above costs.

Startups facing a data breach situation will likely see their coverage limits go even farther because the claims won’t be nearly as massive as those faced by Target, Home Depot, or Anthem this past year.  That’s a very good thing because while the smaller cyber attacks won’t always make the headlines, the danger to startups and small businesses is ever-growing.


If you want to learn more about Cyber Insurance you can email info@foundershield.com at any time. Or create an account here to get a quote!

Related Articles

cyber insurance pricing trends 2024
March 13 • Cyber Liability

Cyber Insurance Pricing Trends 2024

Uncertain about cyber insurance costs in 2024? Our article explores pricing trends, expert predictions on rate increases, and strategies to potentially reduce your cyber insurance premium.

cyber liability insurance premiums
March 4 • Cyber Liability

7 “Must Haves” For Cyber Liability Insurance in 2024

With cyber liability insurance premiums rising, business leaders must have the inside scoop to keep costs low. Our partners at Blacksmith InfoSec delve into those tips and tricks.

Cybersecurity Data Breaches
November 9 • Cyber Liability

Top 10 Cybersecurity Data Breaches of 2023

Today’s digital landscape is frightening for business leaders. Here’s a glimpse into some of the most cringe-worthy data breaches in 2023 — plus, how to avoid them.

Cyber Insurance Pricing Trends
July 19 • Cyber Liability

Cyber Insurance Pricing Trends 2023

After a hard-hit 2022, let’s explore the lessons learned, what currently impacts the cyber market, and cyber insurance pricing trends to expect in the future.

multi factor authentication
January 24 • Cyber Liability

Securing Your Company With Multi-Factor Authentication: A Complete Guide

Cybersecurity is a priority for most company leaders, with multi-factor authentication spearheading the endeavor. Here’s how to make it a reality in your organization.

cybersecurity-awareness-month
October 6 • Cyber LiabilityRisk Management

Cybersecurity Awareness Month 2022 — Data, Data, Goose!

As the leaves turn golden and the wind blows colder, cybersecurity awareness month is upon us! Here’s what it’s all about and how your company can stay cyber-safe.