During the final months of 2013, Target—the well-known American retailer—experienced a large-scale security breach. The Target data breach breach led to several point-of-sale systems being compromised by malware, giving cybercriminals access to millions of customers’ personal and financial data. The incident became one of the most high-profile data breaches of the decade, impacting customers across the country.

Target faced numerous consequences in the aftermath of the breach—including a range of recovery expenses, hundreds of lawsuits, decreased customer confidence, lost profits and widespread criticism related to the company’s initial response. In hindsight, organizations can learn many lessons by analyzing the details of this breach, its impact and Target’s mistakes along the way. Here’s what your organization needs to know.

The Details of the Target Data Breach

Target Data BreachIn September 2013, cybercriminals utilized an email-based phishing scam to trick an employee from Fazio Mechanical—an HVAC contractor and one of Target’s third-party vendors—into providing their credentials. From there, the cybercriminals used these stolen credentials to infiltrate Target’s network and install malware on a number of point-of-sale systems on November 15th. Even though Target had various cybersecurity measures in place to help avoid such an incident, Fazio Mechanical’s lack of malware detection software and both companies’ failure to properly segment their networks permitted the cyber-criminals to execute their plan successfully.

The cybercriminals officially launched the malware and began collecting customer data from Target’s point-of-sale systems on November 27th. Three days later, FireEye—a company that Target had purchased security software from earlier that year—detected the malware and reported the issue to Target’s headquarters. Despite receiving this report, Target did not take steps to stop the malware. After Target’s inadequate response, the cybercriminals were then able to implement exfiltration malware on the point-of-sale systems to transport customer data out of the company’s network. In the coming days, the cybercriminals began moving the data. This activity triggered another report from FireEye on December 2nd. However, Target still did not respond to the malware.

On December 12th, the U.S. Department of Justice identified the malware and notified Target of the breach. At that point, Target began to investigate the incident, receiving assistance from both the Secret Service and the FBI. By December 15th, most of the malware had been removed. On December 18th, a cybersecurity blogger became aware of the breach and publicly shared the incident’s details. One day later, Target released an official statement on the matter, outlining what happened and confirming that the company was working with the proper authorities to resolve the incident. Nevertheless, severe damage had already been done. In total, the cyber criminals compromised approximately 40 million customers’ credit and debit card information as well as 70 million customers’ personal details (e.g., names, addresses and phone numbers).

The Impact of the Target Data Breach

In addition to compromised customer data, Target encountered a series of ramifications after the breach.

Recovery costs
Target had to take several steps to recover from the breach and minimize the risk of future security incidents. Recovery efforts included obtaining assistance from a third-party forensics firm to investigate the breach, offering customers one year of free credit monitoring, setting up a call center for breach-related concerns, equipping point-of-sale systems with chip-and PIN-enabled technology, segmenting different company networks and implementing stricter access controls. The overall cost of these efforts totaled more than $250 million.

Legal expenses
Apart from recovery costs, Target also faced significant legal expenses from the breach. In particular, the company was involved in over 140 lawsuits throughout the country regarding the incident. In 2017—four years after the breach occurred—Target finally reached an $18.5 million settlement spanning 47 states. As part of the settlement, the company was required to consult a third party to help encrypt and further protect customer data, as well as hire an executive responsible for leading a workplace cybersecurity program—thus compounding costs.

Reputational damages
Lastly, Target experienced a range of reputational issues due to the breach—namely, reduced customer confidence and distrust in senior leadership. The timing of the incident was especially detrimental, seeing as it took place during the holiday shopping season and negatively impacted year-end sales.

In fact, Target’s profits dropped by a staggering 46% during the final quarter of 2013. Moving into January 2014, one-third (33%) of U.S. households reported shopping at Target—down 10% from the previous year. The company’s prolonged response to the breach was also heavily criticized, causing stakeholders to hold senior leaders accountable for the delay and demand change. As a result, both Target’s longstanding CEO and chief information officer stepped down in 2014, paving the way for significant transitions in executive leadership.

Lessons Learned from the Target Data Breach

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

Investing in cybersecurity measures is worth it.
This large-scale breach could have been minimized or potentially avoided altogether if Target had additional cybersecurity precautions in place, such as network segmentation and more elaborate data encryption techniques. As such, this incident highlighted the value of investing in adequate cybersecurity procedures. The expense of implementing these measures is well worth the benefit of deterring even costlier incidents further down the road.

An effective cyber incident response plan is critical.
One of Target’s greatest downfalls during the breach was the company’s initial response. Although Target received multiple reports from FireEye about the malware, the company failed to act until the federal government got involved. By responding just days earlier, Target could have stopped the cybercriminals before they could transport customer data—significantly limiting the impact of the breach. What’s more, the company also took extra time to inform the public of the incident, which upset many customers. Such concerns emphasize how critical it is to take reports seriously, act quickly and have an effective cyber incident response plan in place. This type of plan can help an organization establish timely response protocols for remaining operational and mitigating losses in a cyber incident. Generally speaking, an effective cyber incident response plan should outline:

• Who is part of the cyber incident response team (e.g., board members, department leaders, IT professionals, legal experts and HR specialists)
• What roles and responsibilities each member of the cyber incident response team must uphold during an attack
• What the organization’s key functions are and how these operations will continue throughout an attack
• How any critical workplace decisions will be made during an attack
• When and how stakeholders should be informed of an attack (e.g., employees, customers, shareholders and suppliers)
• What federal, state and local regulations the organization must follow when responding to an attack (e.g., incident reporting protocols)
• When and how the organization should seek assistance from additional parties to help recover from an attack (e.g., law enforcement and insurance professionals)

Third-party exposures must be considered.
This breach also showcased the importance of promoting third-party security. After all, Fazio Mechanical’s cyber vulnerabilities are what ultimately led to the onset of the breach. To prevent these exposures, it’s vital to work with vendors, suppliers and other third parties to ensure they uphold effective cyber-security practices. This collaboration may include incorporating cyber risk management within vendor contracts, restricting third parties’ access to sensitive data and monitoring suppliers’ compliance with applicable regulations—such as the Payment Card Industry Data Security Standard.

Proper coverage can make all the difference.
Finally, this breach made it evident that no organization—not even a successful, national retailer like Target—is immune to a data breach. What’s worse, cyber incidents have only increased in cost and frequency since this event occurred. That’s why it’s crucial to ensure adequate protection against cyber-related losses by securing proper coverage. Make sure your organization works with a trusted insurance professional when navigating these coverage decisions.

We can help.

In the unfortunate event that your business falls victim to a cyber attack, of any type, we can help you recover.

Cyber & Data Breach Liability coverages are developing on a daily basis as new threats emerge and new insurance companies enter the market.

Regardless of the type of business, one thing is certain, if you’re a business in operation today, you face cyber risks. Which means, you need to thoroughly understand your risk of a loss, how you would respond if a loss did occur, and whether Cyber & Data Breach Liability coverage makes sense for you.

The level of coverage your business needs is based on your individual operations and can vary depending on your range of exposure. It’s important to work with an Insurance Advisor that can identify your areas of risk, and customize a policy to fit your unique situation.

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 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

When considering business insurance, contracts and requirements are often complex and confusing. As professional insurance agents, CoverLink is in a position to help. We’ll help you secure the right business insurance at the right price so you can enjoy the security and peace-of-mind you deserve, and spend time focusing on your business and not your insurance.

 

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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.