Lawsuit Against Sony Highlights Cyber Insurance Shortcomings

CWmike writes "A brewing legal dispute between Sony and one of its insurers over data breach liability claims highlights the challenges that companies can sometimes face in getting insurance providers to cover expenses arising from cybersecurity incidents. Zurich American Insurance Co. asked the court last week to absolve it of any responsibility for defending or indemnifying Sony against claims arising from the recent data breaches at the company. The data breaches at Sony's PlayStation Network, Sony Entertainment Online and Sony Pictures resulted in account data on close to 100 million individuals becoming exposed and over 12 million credit and debit cards being compromised. The breaches have so far resulted in at least 55 putative class-action lawsuits being filed against Sony in the U.S and another three lawsuits filed against it in Canada. Sony expects to spend close to $180 million in the next year alone on breach-related costs. But analysts say insurance might not have even been worth it in Sony's case: 'There aren't many success stories where cyber insurance [has played] a significant role in reducing the cost of incidents,' said Gartner analyst John Pescatore. Um, better security as an insurance policy maybe?"

Comments

same as it ever was

[Anonymous Coward]

So this is just the same thing that happens everyday to regular people, just scaled up to the corporate level. Insurance companies will absolve themselves of all responsibility to pay a claim whenever they possibly can. Why would it be any different when it's a corporation trying to make the claim?