Sony insurer claims policy does not cover data breach claims

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Sony insurer claims policy does not cover data breach claims

Billy MacInnes
The difficulties of insuring against cyber-attacks have been thrown into sharp relief with the news that one of Sony's insurers has gone to court to escape having to indemnify the electronics giant against claims arising from the massive data breach it suffered in April.

According to US reports, Zurich American Insurance Co has filed documents in a New York State court to free it from the requirement to defend or indemnify Sony against claims arising from the data breach which affected 100,000 users and led to the shutting down of the Playstation Network.

The company argues that its general cover insurance does not extend to damage from cyber attacks but only covers the Sony unit for "bodily injury, property damage or personal and advertising injury".

While it's understandable Zurich American Insurance should seek to avoid covering the payment of what could amount to hundreds of millions of dollars to affected users, the company's actions throw the spotlight on what measures businesses are taking to insure themselves and their customers against the consequences of online data breaches.

Many of those that believe they are covered for such an eventuality might be advised to take a closer look at their existing policies to avoid a similar situation arising in the aftermath of a cyber-attack.

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