Cyberinsurance has existed since the 1990s. The story said that total cyberinsurance premiums paid by businesses last year reached $1.3 billion, up from $1 billion in 2012.
The Times story examines Target's required Security and Exchange Commission filings, which showed the retailer had $100 million in cyberinsurance coverage from multiple carriers, on top of a $10 million deductible. That will "...barely compensate for the $1 billion in losses some analysts are forecasting. Since the breach was discovered, the company has incurred $88 million in breach-related expenses, its filings say, and it expects insurance to cover $52 million of that," the story said.
Target has announced that it will implement more secure chip-and-PIN technology in its stores and for its debit and credit cards That move, estimated to cost $100 million, is not covered by its cyberinsurance policies.
Recovering from the expense and embarrassment of the cyber attack is sure to be a topic of discussion at Target's annual meeting Wednesday in Dallas. The retailer has faced numerous problems of late, including supply chain problems in its Canadian operation, disappointing sales, faltering profits and a very public top management shakeup.
The Star Tribune reports that while shareholder meetings typically have few fireworks, this one could "... prove more contentious as investors home in on the company’s various missteps and take on the controversial recommendation" to toss out seven of Target’s 10 board members."
Target's interim board chairwoman responded by sending a letter to major shareholders and defending the board’s record. She went on the defensive, spelling out steps the board has taken to strengthen data security and pointing out other large companies have also faced similar breaches.
"Some analysts are skeptical that board members will actually lose their seats, but note that votes could be closer than normal, making it uncomfortable for some directors to continue," the story said.