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Court: Sony Insurer Has No Duty To Defend/Indemnify $2 Billion Breach

Companies maintaining personal data had better pay attention to the fine print of their insurance policies. Sony, three years after the breach and facing up to $2 billion in losses, is learning this the hard way.

From Insurance Journal:

“A New York trial court recently ruled in a commercial general liability (CGL) policy coverage case that Zurich American Insurance Co. has no duty to defend Sony Corp. of America and Sony Computer Entertainment America in litigation stemming from the April 2011 hacking of Sony Corp.’s PlayStation online services.

The data breach had exposed personal information of tens of millions of users, and Sony’s losses are estimated to be as high as $2 billion.

In his bench ruling last month, Justice Oing said acts by third-party hackers do not constitute “oral or written publication in any manner of the material that violates a person’s right of privacy” in the Coverage B (personal and advertising injury coverage) under the CGL policy issued by Zurich.”


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