General Liability Insurance for Data Breaches? Be Sure to Read the Policy
Saturday, August 27, 2011

More and more clients are beginning to inquire about cyber-insurance policies to guard against data breaches and other cyber-related losses.  However, when companies don’t have specialized coverages they have to rely on their general liability coverage in the event of a loss.

For these companies, however, Reuters is reporting a potentially troubling set of events. Specifically, Reuters is reporting that: 

Zurich American Insurance Co asked a New York state court in documents filed late on Wednesday to rule it does not have to defend or indemnify Sony against any claims "asserted in the class-action lawsuits, miscellaneous claims, or potential future actions instituted by any state attorney general."

 

Zurich American, a unit of Zurich Financial Services, also sued units of Mitsui Sumitomo Insurance, AIG and ACE Ltd, asking the court to clarify their responsibilities under various insurance policies they had written for Sony.

 

"Zurich doesn't think there's coverage, but to the extent there may be a duty to defend it wants to make sure all of the insurers with a potential duty to defend are contributing," said Richard Bortnick, an attorney at Cozen O'Connor and publisher of the digital law blog CyberInquirer.

 

Bortnick, who is not involved in the case, said that while Sony may be able to claim there was property damage as a result of the data breach, Zurich is likely to argue that the sort of general liability insurance it wrote for Sony was never intended to cover digital attacks.

 What type of coverage do you have and what do your policies say? 

 You can read the article here:

http://www.reuters.com/article/2011/07/21/us-insurance-sony-idUSTRE76K3PY20110721

 

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