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:
- 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.
- 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.
- 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.
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