Cyber attacks: Co-op and Harrods ‘lacked insurance coverage’
Luxury retailer Harrods and the Co-op did not have cyber insurance policies in place when they were attacked by hackers last month.
According to Insurance Insider, unlike Marks and Spencer (M&S), Harrods and the Co-op did not have cyber coverage in place, so the retailers could be on the hook for any losses incurred.
At the end of April, Harrods and the Co-op became the latest major UK households to be hit by a cyber attack.
On 30 April, the Co-op shut down parts of its IT systems and suspended contactless payments at around 10 per cent of stores after detecting a potential breach. Harrods confirmed on 02 May that it had experienced “attempted to gain unauthorised access” to its systems.
All payments at the Co-op were working from 14 May following the attack on its system.
Online purchases on M&S were suspended on 22 April and are still down. Earlier this week, the FTSE 100 group told investors the attack would blow a £300m hole in its earnings this year.
However, M&S had a cyber insurance policy in place.
The retailer is preparing to claim as much as £100m from its cyber insurance policy. Insurance Insider reported that the retailer had a cyber insurance policy arranged by WTW running up to £100m. German insurer Allianz was reportedly the primary carrier on the policy, expected to cover the first £10m, while Lloyd’s insurer Beazley is also among those exposed to the financial losses.
This comes as experts told CityAM that recent attacks on retail giants may drive increased demand for cyber insurance but will force insurers to ask more questions when offering coverage.
Ollie Dent, partner at law firm Kennedys, explained, “[The cyber insurance market] has exploded over the past five years, but it softened in recent months due to an increase in capacity and a slight dip in claims.”
According to insurer broker Marsh, following a spike in 2023, UK cyber claims decreased by 20 per cent in 2024 but remained approximately one-third higher than 2020, 2021, and 2022.
The Co-op and Harrods were approached for comment.