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Sony insurer says it's not liable for costs of data breach

Sues game maker for saying otherwise

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Sony has been sued by its insurance company, which says the policy it issued doesn't cover a series of high-profile security breaches that exposed personal information associated with more than 100 million accounts.

A complaint filed Wednesday by the Zurich American Insurance Company (ZAIC) and the Zurich Insurance Company said the breaches have generated at least 55 class-action complaints against Sony in the US and three in Canada. Additionally Sony has been subject of investigations conducted by one or more state attorney general's offices, the US Federal Trade Commission, and the House Subcommittee on Commerce, Manufacturing, and Trade relating to the unauthorized access of its customers' data.

Sony has said more than 100 million accounts were affected and estimated the cost at $171 million.

The biggest of the breaches stemmed from an April hack attack on its PlayStation Network, which exposed names, addresses, email addresses, passwords, and other sensitive data for 77 million accounts. An attack on Sony Online Entertainment, the company's computer games service, breached the security of another 25 million accounts. Two months later, hackers gained unauthorized access to 50,000 more accounts created on the Sony Pictures website.

According to the complaint, Sony tendered the complaints and claims to Zurich and has demanded that the insurer defend it against the claims. It goes on to say ZAIC isn't obligated to cover the costs because Sony's insurance policy insures only against legal claims for "bodily injury", "property damage", and "personal and advertising injury".

"ZAIC therefore has no obligation to defend or indemnify the Sony defendants under the ZAIC Excess Policy for the claims asserted in the class action complaints or the miscellaneous claims," the complaint, filed in the Supreme Court of New York County, stated. It seeks a court ruling that none of the hack attacks qualify for coverage.

A PDF of the document is here. ®

Internet Security Threat Report 2014

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