Zurich lawsuit against Sony highlights cyber insurance shortcomings

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 companies to cover expenses arising from cybersecurity incidents.

Zurich American Insurance Company asked the Supreme Court of New York 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 one year alone on breach-related costs. Read more...