In the final months of 2018, Marriott International—a hospitality company that oversees one of the biggest hotel chains in the world—discovered that cybercriminals had compromised its guest reservation system. This Marriott data breach exposed the personal information of hundreds of millions of customers from various countries who had made bookings with the company’s Starwood properties over the past several years. As a result of the incident, Marriott faced significant recovery expenses, legal ramifications and reputational damages.

This breach—which ultimately stemmed from existing security vulnerabilities that carried over during Marriott’s 2016 acquisition of Starwood—has since become known as one of the largest cyber incidents the world has ever seen, showcasing the importance of prioritizing cybersecurity during merger and acquisition (M&A) events. In hindsight, there are various cybersecurity lessons that organizations can learn by reviewing the details of this incident, its impact and the mistakes Marriott made along the way. Here’s what your organization needs to know.

The Details of the Marriott Data Breach

Marriott Data Breach

In 2014—two years before Marriott even acquired Starwood—the latter company’s guest reservation system was infiltrated by cybercriminals via remote access trojan (RAT). Put simply, a RAT is a harmful computer program that grants the perpetrator unauthorized administrative control of their victim’s technology. A multitude of digital vulnerabilities at Starwood’s properties could have contributed to the success of the cyber-criminals’ RAT. Namely, these properties were using outdated versions of Windows Server across their computer systems and had left their remote desk protocol (RDP) ports open to the internet. Despite this intrusion within the guest reservation system, Starwood was unable to detect the cybercriminals’ activity—allowing them to remain unnoticed.

Moving forward to September 2016, Marriott officially acquired Starwood. During the acquisition process, Marriott failed to complete a detailed cybersecurity audit of Starwood’s networks and technology. As such, Marriott was also unable to identify the cybercriminals’ activity within Starwood’s guest reservation system—permitting them to stay undetected throughout the acquisition. Additionally, Marriott didn’t discover that Starwood had been further targeted by separate attackers in an unrelated incident during 2015, leaving its workplace devices infected with malware.

Rather than adopt uniform networks and technology following the acquisition, Marriott allowed Starwood properties to move forward with their current operations—thus utilizing a compromised guest reservation system and malware-ridden devices. Marriott also began migrating information from several databases housed within Starwood’s guest reservation system. This information included a variety of customers’ personal details—such as names, addresses, phone numbers, email addresses, passport numbers and credit card numbers.

While the information in these databases was encrypted, the cybercriminals were eventually able to locate their associated decryption keys and subsequently unlock the information. From there, the cybercriminals began exfiltrating the information. After transporting this information, the cybercriminals then re-encrypted it in an effort to remain undetected within the system.

In September 2018—a full two years after the acquisition—Marriott finally identified the breach due to a system security alert. Upon this discovery, Marriott reported the incident to law enforcement officials and consulted forensic specialists to launch an investigation. On Nov. 30, 2018, Marriott revealed the details of the breach to the public in an official statement. At this time, Marriott confirmed that the personal information of nearly 500 million customers around the world—including the United States, Canada and the United Kingdom—had been compromised.

The Impact of the Marriott Data Breach

In addition to exposed data, Marriott faced several consequences following the large-scale breach. This includes the following:

Recovery costs
Marriott incurred nearly $30 million in overall recovery expenses as a result of the breach. This total includes costs related to investigating the cause of the breach, notifying impacted customers of the breach, providing these customers with year-long access to security monitoring software, developing an international call center related to the breach and implementing updated cybersecurity measures to prevent future incidents.

Reputational damages
Apart from recovery costs, Marriott also received widespread criticism for its cybersecurity shortcomings after the incident. In particular, the media and IT experts scrutinized Marriott’s failures to perform its due diligence on Starwood’s existing security vulnerabilities prior to the M&A process and detect the cybercriminals’ activity after the acquisition was finalized—essentially allowing the cybercriminals to access and exfiltrate customers’ personal information for nearly four years. Consequently, Marriott’s stocks dropped by 5% almost immediately after it announced the details of the breach. What’s more, the company is estimated to have suffered over $1 billion in lost revenue due to diminished customer loyalty following the incident.

Legal ramifications
Lastly, Marriott encountered costly legal ramifications from various avenues because of the breach. Since the incident affected individuals from the United Kingdom, the Information Commissioner’s Office fined Marriott over $120 million for violating British customers’ privacy rights under the General Data Protection Regulation. In North America, Marriott was met with multiple class-action lawsuits after announcing the breach—one of which requested $12.5 billion in damages, or $25 for every impacted customer.

Lessons Learned

There are several cybersecurity takeaways from the Marriott data breach. Specifically, the incident emphasized these important lessons:

RDP ports require proper safeguards.
Exposed RDP ports were another potential culprit of this costly incident. Although RDP ports are useful workplace tools that permit employees to connect remotely to other servers or devices, leaving these ports open can allow cybercriminals to leverage them as a vector for deploying malicious software or other harmful programs (including RATs). That being said, RDP ports should never be unnecessarily left open to the internet. Virtual private networks (VPNs) and multi-factor authentication protocols can also be utilized to help keep RDP ports from being exploited by cybercriminals.

Cybersecurity must be considered during M&A events.
Marriott neglecting to prioritize cybersecurity amid its acquisition of Starwood proved detrimental in this breach. Primarily, Marriott should have diligently assessed Starwood’s IT vulnerabilities throughout the M&A process. Further, Marriott should have ensured an effective cybersecurity infrastructure between the combined companies once the acquisition took place. Especially as cyber incidents continue to surge in both cost and frequency, cybersecurity should be top of mind during any M&A activity. In particular, each company involved in the M&A process should be carefully evaluated for potential cybersecurity gaps. A proper plan for rectifying or—at the very least—mitigating these exposures should be developed prior to the finalization of the M&A event. In many cases, it can also be advantageous for merged companies to adopt shared digital processes and security policies in order to maintain uniform defense strategies against cybercriminals.

Effective security and threat detection software is critical.
A wide range of security and threat detection software likely could have helped both Starwood and Marriott identify and mitigate this breach in a much faster manner—thus reducing the resulting damages. Although this software may seem like an expensive investment, it’s well worth it to minimize the impacts of potentially devastating cyber incidents. Necessary software to consider includes network monitoring systems, antivirus programs, endpoint detection products and patch management tools. Also, it’s valuable to conduct routine penetration testing to determine whether this software possesses any security gaps or ongoing vulnerabilities. If such testing reveals any problems, these issues should be addressed immediately.

Proper coverage can provide much-needed protection.
Finally, this breach made it clear that no organization—not even an international hospitality company—is immune to cyber-related losses. That’s why it’s crucial to ensure adequate protection against potential cyber incidents by securing proper coverage. Make sure your organization works with a trusted insurance advisor when navigating these coverage decisions.

We are here to help.

If you’d like additional information and resources, we’re here to help you analyze your needs and make the right coverage decisions to protect your operations from unnecessary risk. You can download a free copy of our eBook, or if you’re ready make Cyber Liability Insurance a part of your insurance portfolio, Request a Proposal or download and get started on our Cyber & Data Breach Insurance Application and we’ll get to work for you.

Tom Simon

Tom Simon

Chairman of the Board

Tom has worked in the insurance industry since 1977 holding numerous positions from Account Executive and Agency Manager, President to his current role. He combines his unique ability of thinking differently with his wealth of insurance and business experience to propel CoverLink to new levels of success.

In his spare time, he enjoys spending time with his family, especially his grandkids. In addition, he’s also an avid woodsman… yes, you read that correctly. He can often be found yelling “timber” or just splitting firewood for family and friends.

 

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Matt Simon

President

Prior to joining the team at CoverLink in 2006, Matt worked as an Underwriter with a multi-state insurance company located in Columbus, Ohio. Matt is a Certified Insurance Counselor (CIC) and Chartered Property and Casualty Underwriter (CPCU), having successfully completed the rigorous coursework and exams to earn these designations.

He also serves on the Board of Directors for the Ohio Insurance Agents Association and the Associated Risk Managers of Ohio, in addition to volunteering his time to multiple other community and industry organizations.

In 2013, Matt was awarded and recognized as the National Young Insurance Agent of the Year, and in 2019 he was recognized as the Insurance Advisor of the year by Finance Monthly.

 

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Gina Loehr

Gina Loehr

Senior Account Manager

Gina oversees the Commercial Lines division at CoverLink, which is responsible for managing the business insurance needs for clients.

She has worked in the insurance industry since 1980, beginning as a Commercial Underwriter with a regional company located in Springfield, Ohio.

In 1984, she earned her Certificate in General Insurance, and in 1995, her Accredited Advisor of Insurance designation.

In her spare time, she enjoys spending time with her family, including four grandkids, and biking.

 

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Kyle Carper

Account Manager

Kyle joined the CoverLink team in 2018 as in intern when he was a junior in high school. Shortly after, he began studying to obtain his insurance license, which he passed in 2020 and joined our Personal Lines division.

Kyle helps individuals and families with their home, auto, umbrella and other personal insurance needs, which he thoroughly enjoys.

In his spare time, he enjoys spending time with the ones he loves, watching sports and playing video games.

 

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Tim O’Rielley

Senior Insurance Advisor

Tim works with individuals, families and businesses to design insurance policies perfectly suited to their specific needs.

He has been working in the insurance industry, and with CoverLink, since 1993. As a lifelong resident of Logan County, he’s been involved with a number of community organizations, often taking the leadership role such as President of the Chamber of Commerce, and the United Way.

He’s often found spending as much time as possible with his two daughters, and his grandkids

 

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Mark Osborne

Account Executive

Mark has worked at CoverLink since 2004. He specializes in life and health insurance, where he utilizes his extensive knowledge to help clients make sense of a confusing and ever changing market.

He also holds the Property & Casualty Insurance License, and often helps families as well as small businesses to set up their insurance protection plan.

Mark graciously volunteers his time to several community organizations, and enjoys spending his free time with his family

 

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Leah Loehr

Account Manager

Leah joined the Commercial Lines division at CoverLink in 2012 where she works closely with business owners on their Commercial Insurance needs to help them achieve their desired level of protection.

Leah is known for her outgoing personality, positive attitude, and relentless pursuit of the goals she sets out to achieve. Clients often rave about her and the service she provides.

In her spare time, Leah enjoys spending time with her family and friends… and she can often be found at the closest Buffalo Wild Wings!

 

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Larry Middaugh

Larry Middaugh, PLCS

Senior Insurance Advisor

Larry joined CoverLink with an extensive background in sales, bringing over 30 years of experience and commitment to taking care of his clients in the banking and mortgage industry.

Larry’s dedication to his clients aligned so well with the CoverLink tradition of relentlessly caring for, and protecting its clients, that he joined the team of Licensed Insurance Advisors in 2015.

Those in need of Personal or Business Insurance are delighted after working with Larry.

Larry defines success as knowing his purpose in life, continuing to grow to reach his fullest potential and sowing seeds that benefit others. He’s a father of three incredible children and husband to an amazing, kind and loving wife.

 

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Tony Fink

Tony Fink, CIC, CLCS

Insurance Advisor

Tony is responsible for serving the needs of individuals and businesses looking for property & casualty insurance. In addition, he’s licensed and capable of advising clients that desire life insurance protection.

He’s a Certified Insurance Counselor (CIC) and a Commercial Lines Coverage Specialist (CLCS), having successfully completed the rigorous coursework and exams to earn these designations.

Tony entered the insurance industry in 2008 bringing a diverse background of experience and knowledge to his Account Executive position with CoverLink.

In his free time, Tony enjoys spending time with his family, being outdoors, following sports and listening to music.

 

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Meg Barton

Meg Barton

Senior Account Manager

Meg works in the Commercial Lines division at CoverLink as an Account Manager, where she helps businesses with their varying & complex insurance needs, from Business Auto to Commercial Liability, Directors & Officers to Commercial Property.

Meg earned her Bachelor’s degree in Business Management from Urbana University in Ohio. She has been active in the insurance industry since 2006, and is an Ohio Notary.

In her spare time, Meg enjoys spending time with her family at Indian Lake, listening to live music and reading.

 

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Jordan Springs

Jordan Springs

Account Manager

Jordan joined the CoverLink team in 2017, bringing top-notch client service skills acquired through several years in the banking industry.

She’s constantly assisting and advising clients on their personal insurance needs – home, auto, jewelry, umbrella and other policies – not to mention, she’s just plain fun to be around!

In her spare time, Jordan enjoys spending time with family and friends, especially her husband and two kids.

 

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Jill Rawlins

Jill Rawlins

Account Manager

Jill works in the Personal Lines Department where she helps individuals and families with their Home, Auto, Umbrella and other personal insurance needs.

She graduated with her Bachelor’s Degree in 2009 from Otterbein University, and shortly after began her career in the insurance industry.

In addition to holding the Ohio Property & Casualty Insurance License, she also has her Accident & Health, Life and Variable licenses.

Jill enjoys spending as much time as she can with her family, and especially enjoys being with her little girl who makes her laugh often.

 

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Chris Badenhop

Chris Badenhop

Insurance Advisor

Chris joined the CoverLink team in 2017 with a diverse and exciting professional and educational background. He works with individuals, families and businesses to find the ideal solution for their insurance needs.

He brings a positive attitude and a desire to help his clients in his position as an Insurance Advisor, but most importantly, he shares one of the most fundamental beliefs we hold dear within our organization: he cares. He cares about his clients, he cares about protecting all that’s important to them, and above all, he cares about doing what’s in the best interest of his clients. His enthusiasm and empathy set him apart, and he’s backed by the top-notch service provided at CoverLink, making him a tremendous asset to his clients. In short, Chris puts people before policies.

In his free time Chris enjoys spending time in the outdoors hunting and fishing. He’s also a passionate sports fan devoting support to all levels of play.

 

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Joe Cooney

Joe Cooney

Senior Insurance Advisor

Shortly after graduating from John Carrol University in 2008, Joe began his insurance career. His original focus and expertise was on personal lines and small commercial accounts, but he has since expanded his focus to include Cyber Insurance and Life Insurance, among other products.

Joe resides in Fairview Park, Ohio with his wife Megan and young son Jack. In his spare time, he coaches youth basketball and volunteers for the special Olympics.

 

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Kelli Young

Kelli Young

Director of Marketing

Kelli brings extensive marketing expertise to CoverLink after spending nine years in the automotive industry, where she gained valuable insight in the areas of design, digital presence, and content creation.

After joining CoverLink in 2015, her focus has been on telling the story of our long standing belief, that people are more important than policies, in a fresh way with a digital twist, allowing consumers who believe what we believe to find us easier.

Kelli graduated from Ohio University in 2006 with a Bachelor’s Degree in Communications, and earned her Master’s Degree in Business from Ashland University in 2010.

She enjoys spending time with her family, especially being outside with her son and two daughters.

 

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Jami Radern

Jami Rader

Director of First Impressions

As the Director of First Impressions, Jami brings top-notch client service skills. She’s constantly assisting clients with billing inquiries, working to resolve any frustrating issues they’re having, and she’s just plain fun to be around!

In her spare time, Jami enjoys spending time with family, especially her husband and four children and going on four-wheeling trips together.

Erika Asher

Account Manager

Erika works in the Commercial Lines division at CoverLink as an Account Manager, where she helps businesses with their varying & complex insurance needs, from Business Auto to Commercial Liability, Directors & Officers to Commercial Property.

In her spare time, Erika enjoys hiking, reading, and spending time with her son.

 

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Erin Whitaker

Account Manager

Erin joined the Personal Lines division at CoverLink in 2019, as an Account Manager, where she helps individuals and families with their Home, Auto, Umbrella and other personal insurance.

She previously worked in the healthcare industry before getting her insurance license in November of 2018.

When Erin isn’t at work, you can find her cheering on her kids at various sporting events almost every day of the week. In addition, she enjoys planting flowers, finding rusty items to decorate with and spending as much time with her family as possible.

Alissa Grim

Alissa Grim

Account Manager

Alissa works as an Account Manager where she helps individuals and families find the insurance that best fits their needs.

In addition to earning her Ohio Property & Casualty Insurance license in 2008, Alissa received her Life Insurance License in 2010.

In her spare time, Alissa enjoys spending time with her family camping, and watching her son race go karts around the U.S.

Vickie Allen

Vickie Allen

Account Manager

Vickie has worked at CoverLink since 2000 helping clients with a diverse set of needs, from securing the coverage that’s best for their individual situation, to providing guidance when claims or billing questions arise.

Vickie currently holds the Ohio Property & Casualty Insurance License, and is well known to clients because of her infectious personality and radiant smile that greets them when visiting the office.

In her spare time she enjoys spending time with family and friends, and traveling.

Randy Leopard

Randy Leopard

Vice President

Randy began his insurance career in 2000 working with both personal and business clients on their health insurance needs.  In 2008, he expanded his area of focus to include all types of insurance his clients needed from home & auto insurance, business insurance and farm insurance.

Randy resides in Urbana where he enjoys spending time with his family, and watching his horses race from time to time.

Melodi Wilkins

Melodi Wilkins

Senior Account Manager

Melodi has called CoverLink her ‘work home’ since 2009.  In her position as a Senior Account Manager, she works closely with clients needing home, condo, renters, auto, umbrella and other types of personal insurance coverage. Melodi also provides service and assistance to businesses regarding their insurance protection needs.

In her spare time, Melodi enjoys being outside and spending time with her family, especially with her granddaughter.

Morgan Edwards

Morgan Edwards

Account Manager

Morgan joined the CoverLink family in 2019, as an Account Manager. She helps her clients with personal insurance needs such as, home, condo, renters, auto umbrella and more. In addition, she works closely with business owners on their Commercial Insurance needs to help them achieve their desired level of protection.

In her spare time, Morgan enjoys spending time with her family and friends, making memories and enjoying all that life has to offer!

Sam Ankrom

Insurance Advisor

Sam joined the Coverlink team in 2020 with a strong passion and drive to help people. As an insurance Advisor with his Property & Casualty license, he assists individuals and business with all of their insurance needs.

He is dedicated to going above and beyond for his clients and wants to make sure every client is not only properly insured, but can also feel like a part of the Coverlink family. Sam is committed to helping everyone feel confident and comfortable with their insurance decisions and have the peace of mind knowing they are taken care of by not only himself, but by the entire Coverlink team.

Outside of work you can usually find Sam spending time with friends and family, or outside on the golf course.