GDP Blog

What was the real cost of the Target Breach?

Posted by John Powter

May 1, 2014 9:39:00 AM

Hackers_behind_TARGET_data_breach_are_looking_for_crackers_to_decrypt_Credit_card_PINs

One of the biggest stories of the 2013 holiday shopping season had nothing to do with the hottest toys or the increased reliance on online shopping: Hackers infiltrated Target’s point-of-sale system in December and gained access to the credit and debit card information of 40 million customers and the personal information of 70 million more.

An HVAC company out of NC is allegedly responsible for the Target Breach, how did such a small company hurt a fortune 100 company?  Because hackers know you don't have the resources to protect your network.  

What was the real cost to Target? Here are the numbers in

  70,000,000  Number of card holders affected
120,000,000  Potential cost to Target
200,000,000  Cost to the Banking industry

It is estimated only 60% of the first number is going to be paid for by the insurance companies. 

How many of you didn't shop at Target for a period of time?
Would you ever own a target credit card again?
What happened to the stock price?
When Target goes out to refinance debt how will the banks react?

These are the true costs that Target will have to deal with for decades. And the interesting thing all those items above you can't by an insurance policy for.

As technology becomes increasingly important for successful business operations, the value of a strong cyber liability insurance policy will only continue to grow. The continued rise in the amount of information stored and transferred electronically has resulted in a remarkable increase in the potential exposures facing businesses. In an age where a stolen laptop or hacked account can instantly compromise the personal data of thousands of customers, or an ill-advised post on a social media site can be read by hundreds in a matter of minutes, protecting yourself from cyber liability is just as important as some of the more traditional exposures businesses account for in their commercial general liability (CGL) policies.

Whereas CGL, commercial property and commercial theft policies can cover damage to your tangible property, none of these will provide coverage for loss of data, which is considered intangible. Intangible property values often far outweigh tangible property, making cyber liability coverage a no-brainer if you maintain a strong online presence or handle a customer’s private information.

A typical cyber liability policy can help protect you from costs associated with a data breach, copyright or trademark infringement, data loss due to natural disasters or hacking and business interruption.

New technological exposures continue to emerge. As your business grows, make sure your cyber liability coverage grows with it. Awesome Agency is here to help you analyze your needs and make the right coverage decisions to protect your operations from unnecessary risk.

Zurich released a study that links a cyber attack poses the same economic risk to the US as the housing bubble in 2008.     Call our office today to schedule a 15 minute review to make sure you company is protected against this emerging risk.

Topics: Risk Management

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