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Sony Privacy The Almighty Buck The Courts

Sony Insurer Suing To Deny Data Breach Coverage 122

Posted by timothy
from the liability-for-someone-only-not-you dept.
idontgno writes "It keeps getting better and better for Sony and its business units. Reuters reports that Sony's insurer, Zurich American, is suing to avoid paying out on Sony's legal liability which may arise from its spectacular online security breaches a few months ago."
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Sony Insurer Suing To Deny Data Breach Coverage

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  • by bluefoxlucid (723572) on Friday July 22, 2011 @07:53AM (#36844506) Journal

    Well, they have a valid case. It's going to get heard by a judge, for sure; this isn't some ridiculous "Oh we don't feel like holding up to our contract because it's bad for us today" kind of thing. What happened here is Sony took out insurance and then caused a massive problem leading to a massive claim through unimaginably gross negligence. It's like if you insure a car and then proceed to speed at 180mph and slam into shit ... your insurer will go, "Oh HELL no," and try to wiggle out of the claims. Often they have clauses that vaguely let them do so, on a good day; whereas basic neglect and driver failure will get them slapped around because that's what you're insured for.

    Basically Sony did the equivalent of buying 100k/300k liability insurance and then organizing a massive illegal street race through a complicated course in the city. Gross, gross negligence. Now their insurers are going, "There is no way in Hell we should have to pay for this!" Sony looks like it didn't even try to secure its networks, just like someone running an Indy 500 on open roads looks like they've bought car insurance to avoid having to care about all the damage they know's going to eventually happen.

    It's tricky, but it's good enough to get you a day in court. If you just show up like "Well we have a contract but we don't wanna pay..." the judge won't even hear your case.

  • by AngryDeuce (2205124) on Friday July 22, 2011 @07:55AM (#36844534)

    If Sony's issues were due to their own negligence in securing their network, why should the insurance company have to pay? If I'm driving drunk my insurance company isn't going to cover my car when I get into an accident, so why the hell should an insurance company cover this?

    If Sony was a person this wouldn't even be a question...

  • by erroneus (253617) on Friday July 22, 2011 @07:56AM (#36844548) Homepage

    This makes me respect the attacks on Sony all the more. The attacks on Sony did more damage than the temporary breeches and outages. Those can be forgotten in a short time. But when insurance coverage is being denied, real and long-lasting damage has indeed occurred.

    An insurance company will often deny coverage to parties who are risky. If a party engages in behavior that, for example, makes them a target of angry people, they are a higher risk. Sony has made many, many parties angry and in this case, they made themselves target. What's more, they failed to improve security at any site or location that bears the Sony brand. This makes them more than risky, it makes them negligent.

    I only wish "arrogance" were enough cause to raise insurance rates... but then again, insurance companies would all be uninsurable.

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