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Three Lessons Businesses Can Learn From Target

Wednesday, March 26, 2014
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In early January, Target made headlines for all the wrong reasons. In early January, the retail giant announced that the personal information of an additional 70 million customers – including their names, addresses and phone numbers – may have been stolen.

While Target is a “high-profile” victim, the reality is the last six months, 60% of businesses with less than 100 employees have been victimized. There are some good lessons that can be learned from Target’s data breach:

  1. Restored Credibility & Trust – Target offered one year of free credit monitoring, identity theft protection and zero liability for the cost of fraudulent charges to all its customers. Offering this is a smart move on Target’s part to protect its credibility and to maintain good customer relationships. But offering all of this isn’t cheap.
  2. Underestimated Coverage – According to the Ponemon Institute’s 2013 Cost of a Data Breach study, the average cost of a breached record is $188, which includes both direct and indirect expenses incurred by the organization. Target had at least $100 million of cyber insurance coverage. However, at a cost of $188 per record for 70 million customers, their existing coverage is likely to fall very short of actual costs.
  3. Having the Right Coverage for Cyber – Many times, companies think that commercial property and commercial theft policies will provide coverage for loss of data, which is considered intangible. Intangible property values often far outweigh tangible property.

 

Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.

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