Sony Insurer Says 'No Thanks' To Data Breach Lawsuit Coverage

Sony’s insurance company is trying to wriggle out of forking over cash for mounting legal claims against the electronics giant related to a massive cyber attack and data breach earlier this year.

Zurich American Insurance, a division of Zurich Financial Services, requested of a New York state court Wednesday that it be exempt from defending its client Sony against any and all legal claims, including current pending class action lawsuits, following the massive data breach the company suffered in April, Reuters reported.

In addition, Zurich American also embarked on lawsuits against other insurance providers of Sony’s, including Mitsui Sumitomo Insurance, AIG and ACE Ltd, asking them to clarify the parameters of their coverage and responsibilities to the electronics giant.

The legal tussle follows after Sony suffered massive cyber attack against its PlayStation Network in April , which compromised accounts of about 77 million users. The hack exposed personal information, including names, addresses, phone numbers, and e-mail addresses, as well as login credentials and other purchasing information, while another cyber attack against Sony Entertainmentcompromised an addition 24.6 million accounts, forcing the company to shut down its online services for six weeks before fully restoring its systems.

Since the record-breaking hack in April, a slew of Sony subsidiaries have also been targeted in numerous attacks, including the Greek subsidiary Sony BMG , Japan’s So-Net and Sony Thailand, by hackers intent on exposing security weaknesses in its network.

Subsequently, Sony has been hit by a maelstrom of class actions lawsuits -- 55 altogether -- in the U.S. alone, according to Reuters. Sony said in May that it would aim to rely on insurers to help foot the massive bill.

Sony reported earlier this year that it anticipated costs associated with the breach to land in the range of $178 million, which included remediation and expenses to bolster security infrastructure. The figure, however, did not include the legal remuneration or punitive costs that could result.

The legal dispute between Sony and Zurich may determine exactly what is covered under a general insurance policy, what constitutes property damage and whether that definition applies to damage incurred to a company as the result of a cyber attack.

Source: crn.com