Sony has said it wants insurers to help pay for massive data breach

Sony insurer in litigation over data breach claims

Sony insurer Zurich American Insurance has petitioned a court to rule it does not need to pay out for data breach legal claims.

Zurich American, a unit of Zurich Financial Services, asked the New York state court this week to rule that it does not have to defend or indemnify Sony against any claims "asserted in the class-action lawsuits, miscellaneous claims, or potential future actions instituted by any state attorney general."

"Zurich doesn't think there's coverage, but to the extent there may be a duty to defend it wants to make sure all of the insurers with a potential duty to defend are contributing," said Richard Bortnick, an attorney at Cozen O'Connor and publisher of the digital law blog CyberInquirer.

He added that while Sony may be able to claim there was property damage as a result of the data breach, Zurich is likely to argue that the sort of general liability insurance it wrote for Sony was never intended to cover digital attacks.

The dispute comes as demand soars for "cyberinsurance," with companies seeking to protect themselves against customer claims and associated costs for data and identity theft and these policies have become a huge subject of debate in the insurance industry.

Zurich American has also sued units of Mitsui Sumitomo Insurance, AIG and ACE Ltd, asking the court to clarify their responsibilities under various insurance policies they had written for Sony.

Earlier this year hackers accessed personal data for more than 100 million users of Sony's online video games, and Sony said it could not rule out that some 12.3 million credit card numbers had been obtained during the hacking

Sony later said it was looking to its insurers to help pay for its massive data breach, and that it expects the hacking to drag down operating profit by 14 billion yen ($178 million) in the current financial year, including costs for boosting security measures but not including potential compensation.

A Sony spokesman said the company does not comment on pending litigation.

AIG declined to comment, and Mitsui Sumitomo could not immediately be reached.

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