Last Friday, November 15, 2019, Target filed a lawsuit against Chubb Corp and ACE American Insurance Co. Target issuing the insurance company following its failure to issue new credit cards after the 2013 data breach. Claims filed by the retail giant amounts to $74 million and was filed in the US District Court in Minnesota.
ACE American Insurance Co. is now part of Chubb Corp. The lawsuit against the insurer comes after Target maintains it paid out $138 million to settle the 2013 data breach.
According to Infosecurity Magazine, the 2013 data breach stemmed from hackers gaining access to a Target database. Hackers supposedly installed software on the Target database to mine customer information. In total, more than 60 million customer information was compromised and 40 million credit card information were made vulnerable.
Following the data breach, Target was required to issue new credit cards to its users. This reportedly cost the retail firm $138 million. Apart from card issuance, the cost also covers attorney’s fees.
Despite some costs being paid by ACE, Target maintains that approximately $74 million remains to be settled, reveals Star Tribune. The retailer believes ACE should have protected its interests, including the “loss of tangible property that is not physically injured.” Target says it “was held liable for the loss of use of plastic payment cards that were not physically injured.”
“Numerous banks were required to dedicate substantial resources to canceling and reissuing physical payment cards,” notes the lawsuit. “These costs include… the cost of producing the plastic card, mailing the card… and otherwise reissuing the physical card.”
In a statement, the retail giant shared that it had been in the talks with ACE for more than a year, to no avail. It had requested for policy coverage, saying they “believe the costs are covered within the scope of the insurance policy.” However, ACE remained steadfast in denying these requests since 2014, states the Star Tribune.
Although the case remains public, a representative for Chubb said it will not comment on the current case.
In total, the 2013 data breach cost the retail firm a whopping $292 million.
Of this amount, only $90 million had been covered by their insurer. Part of the costs came from the class-action lawsuit filed by banks amounting to $58 million. Meanwhile, the retail company also settled undisclosed amounts with card issuers such as American Express, Visa and Mastercard.