Privacy & Information Security Law Blog

As reported on the Insurance Recovery blog, earlier this week, retailer Tesco Plc’s (“Tesco”) banking branch reported that £2.5 million (approximately $3 million) had been stolen from 9,000 customer bank accounts over the weekend in what cyber experts said was the first mass hacking of accounts at a western bank. The reported loss still is being investigated by UK authorities, but is believed to have occurred through the bank’s online banking system. The loss, which is about half of what Tesco initially estimated, is still substantial and serves as a strong reminder that cyber-related losses are a real threat to retailers and other industries. According to reports, Tesco spent £500 million (approximately $618 million) building up its technology platform over the past seven years. Even that very substantial expenditure was not enough, however, to prevent the recent hack, illustrating the need for robust cyber insurance as a component of any comprehensive cyber protection program.