Target’s Total Could Climb to $165 Million in Cyberbreach Claims Payments
Target Corp. TGT has $165 million of insurance that could be used to pay claims tied to the massive data breach that affected 70 million customers late last year. The nation’s third-biggest retailer has $100 million in cyber insurance and $65 million in directors and officers liability coverage, according to news reports. Among its insurers are American International Group Inc. AIG and Axis Capital Holdings Ltd AXS .
“In today’s age and situation and in the wake of the TGX event, people should have had D&O coverage,” said Craig Johnson, president of Customer Growth Partners LLC, a retail consulting and research firm.
TJX Companies TJX , the parent company of retailers T.J. Maxx and Marshalls, had a massive data breach in 2007. More than 45 million credit and debit cards were stolen from its systems over 18 months, making it at the time the biggest loss of personal data.
Any firm that didn’t have coverage before than incident got coverage, says Johnson.
Target has acknowledged it was the target of a cyber attack between Nov. 27 and Dec. 15 and data for more than 70 million customers was compromised. The Minneapolis-based retailer has said the customers will have not be liable for any fraud that occurs as a result of the data breach. Target had no comment on insurance coverage.
“I suspect ever since the Target data breach broke, other retailers reviewed their coverage and ramped it up,” said Johnson.