July 23, 2011

Sony Insurer Asks Court For Hacking Lawsuit Protection

One of Sony's insurers is asking a court to rule that it is not financially liable for lawsuits stemming from a cyberattack earlier this year that targeted the company's PlayStation Network resulting in a massive data breach, various media outlets reported Friday.

According to BBC News, "Zurich American Insurance has now gone to court in New York seeking a declaration that it does not have to help Sony with current or future legal action related to the data breach."

The British news agency also reported that legal documents filed by the insurance firm have revealed that 55 different class action lawsuits are pending, in the US alone, following the April hacker attack that compromised an estimated 77 million PlayStation Network accounts

"The firm agreed to pay anyone who lost-out financially as a result of the incident, but it is still being sued by a number of users," the BBC added.

Reuters reporter Ben Berkowitz added that Zurich American, a subsidiary of Zurich Financial Services, filed documents late Wednesday evening asking the courts "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'."

Furthermore, Berkowitz noted that the insurer had also filed suit against Mitsui Sumitomo Insurance, AIG and ACE Limited, asking the court to clarify their responsibilities under each of their policies with the Tokyo-based electronics giant.

"Richard Bortnick, an attorney at Cozen O'Connor and publisher of the digital law blog CyberInquirer"¦ said that while Sony may be able to claim there was property damage as a result of the data breach," the Reuters reporter added. "Zurich is likely to argue that the sort of general liability insurance it wrote for Sony was never intended to cover digital attacks."

A Sony spokesman told Berkowitz that the company would not comment on pending litigation. Representatives from AIG declined to comment, while the Reuters reporter's attempts to reach Mitsui Sumitomo were unsuccessful.

"The April attack on Sony's data centers in San Diego compromised more than 100 million customer accounts, the second- largest online data breach in U.S. history, and will cost the company an estimated 14 billion yen ($173 million) this fiscal year," Bloomberg's Chris Dolmetsch wrote on Thursday.


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