The Tech Herald

Sony faces legal battle as insurer denies PSN data loss liability

by Steven Mostyn - Jul 25 2011, 14:26

More dark days ahead for Sony. Image: Sony.

Are you a PlayStation Network (PSN) user left in a state of perpetual disgruntlement after sensitive customer details were compromised during a recent spate of online data breaches?

If so, here’s a modicum of news that will either tickle the corners of your mouth into half a smile, or add an extra few millimetres to the depth of your gradually expanding frown lines:

One of Sony’s mainstay insurance providers is refusing to accept liability for damages and compensation connected to the infamous hack attacks that led to the pilfering of some 77 million PSN customer accounts.

Zurich American Insurance Co. is so adamant regarding its lack of liability that it has taken the argument to a New York state court, where it has filed legal papers covering a total of 55 pending class-action lawsuits customers have lodged against Sony.

According to Reuters, Zurich claims the insurance policy drawn up for Sony Corp. does not provide protection against related data breach losses and damage sustained during the PlayStation breach.

Zurich is arguing that it is “not obligated to defend or indemnify any of the Sony defendants for the claims asserted in the class-action lawsuits, miscellaneous claims, or potential future actions instituted by any state attorney general.”

Further to that, the insurer also contends that Sony’s policy only covers “bodily injury, property damage or personal and advertising injury,” none of which are being put forth by claimants seeking compensation for the data loss.

Interestingly, while the wriggling insurer insists its policy doesn’t cover hack damage, its filing also asks that any other insurance companies connected to Sony should be forced to issue monetary contributions if the court rules in favour of the Japanese electronics giant.

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