Sony Insurer Sues to Deny Data Breach Coverage

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I'm not one to normally side with insurance company lawyers but why should the insurance company have to pay for a self inflicted wound? :D

One of Sony Corp's insurers has asked a court to declare that it does not have to pay to defend the media and electronics conglomerate from mounting legal claims related to a massive data breach earlier this year.
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Don't insurance companies have crazy rules to avoid paying as much as possible?
 
It's all in the contract, right?

Sony may have been "self inflicted", but if someone sells them some insurance that covers exactly what happened -- as much as I'm upset about what happened -- the insurance company better pay for it!

If I bought Identity Theft insurance and I was a victim, and an insurance company said that I was not going to be covered because I was the one that gave my information to the company that got hacked... I'd be dragging them to court to cover it.
 
Agreed. Sony was negligent and careless. It seems easy enough to prove their negligence, but Casey Anthony's case seemed to be an easy win so who knows.
 
Insurance companies are always like that. You pay out the ass to have "protection" but when it comes time for them to pay... nope, they refuse, or they drop you or some other bullshit. Ever wonder why they are all named State FARM, FARMERS, etc? Cause all they do is illegitimately farm money from people. Insurance is a joke.
 
While I agree that most insurance companies are nothing more than legitimized scam artists they also have some rules in place to protect them from abuse or negligence. We really don't know anything unless we see their contract or specific clause regarding this.
 
If Sony somehow did not fulfill their contract obligations (aka not patched servers or what ever), then sure why should the insurance company pay?

But if Sony did not break the contract then they better pay up. It's not Sony's fault the insurance company didn't know the risks for a policy they received money for.

Negligence can be tough to prove... it would be easy if Sony posted all the info on a public site etc

Yet on the other hand insurance companies piss me off... Its the only gambling I know of where the house is guaranteed to make money in virtually any timeframe or situation.

During Katrina all the insurance companies were bitching about how much it was cost, raising rates etc etc... Yet 4 mo later they are reporting record earnings. Isn't insurance a gamble for consumers (essentially that is what it is)? Why should it be any different for the vendor? You have bad "Katrina" years and you have profitable years (obviously I have not problem with turning a profit... but I am highly suspicious that one is turned in the worst situation). It's like a company saying, sales went down 100%, we lost every major lawsuit, but profits are still a record high!

I just don't get how insurance can get away with the crap it does. One of the few legal sectors that can discriminate on sex, age, credit without any actual history of the particular customer.
 
Tiburon1186 said:
Insurance companies are always like that. You pay out the ass to have "protection" but when it comes time for them to pay... nope, they refuse, or they drop you or some other bullshit. Ever wonder why they are all named State FARM, FARMERS, etc? Cause all they do is illegitimately farm money from people. Insurance is a joke.
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Yep. I'm sure they had NO problem collecting those payments from Sony before something happened, but when something did in fact happen suddenly it's 'Woah, our policy may be a general one that covers a range of things, and sure we didn't exclude what happened to you, but well, we don't want to pay.'
 
Demon10000 said:
It's all in the contract, right?

Sony may have been "self inflicted", but if someone sells them some insurance that covers exactly what happened -- as much as I'm upset about what happened -- the insurance company better pay for it!

If I bought Identity Theft insurance and I was a victim, and an insurance company said that I was not going to be covered because I was the one that gave my information to the company that got hacked... I'd be dragging them to court to cover it.
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[ame="http://en.wikipedia.org/wiki/Contributory_negligence"]Contributory negligence - Wikipedia, the free encyclopedia@@AMEPARAM@@/wiki/File:Scale_of_justice_2.svg" class="image" title="Scales of justice"><img alt="Scales of justice" src="http://upload.wikimedia.org/wikipedia/commons/thumb/0/0e/Scale_of_justice_2.svg/100px-Scale_of_justice_2.svg.png"@@AMEPARAM@@commons/thumb/0/0e/Scale_of_justice_2.svg/100px-Scale_of_justice_2.svg.png[/ame]
 
Wait, what was this insurance supposed to be covering in the insurer's mind?
Bodily injury resulting from use of the PSN? How does that work anyway?
 
Giant corporations shouldn't be allowed to get insurance for legal defense because they already have herds of lawyers working for them. Giant corporations need to be held accountable and if they screw up then their bank account should take a hit. Instead the insurance company is taking the hit for them. What a cop out.
 
This reminded me of a local mall that was flooded, had flood insurance, but the insurance company refused to pay out because the chances of a flood were so low (not in a 100-year flood zone). That's right - the insurance offering flood insurance wouldn't pay the full amount BECAUSE the odds of the flood were so low and the building wasn't in a 100-year flood zone - it became an 'extraordinary' event because the odds of the flood were so low. The mall was insured for $200 million, and the insurance company was only willing to pay out a quarter of the policy.

I looked the details of it up from a local news site to refresh my memory, and it turns out it was the SAME insurance company refusing to honor their deal with Sony. Zurich American Insurance Co. Wow, if I was running a company I know what insurance company I would avoid, seems this particular one refuses to pay for anything.
 
Ugh, insurance companies. Us folks on the Gulf Coast after Ivan/Katrina and those in Alabama from the recent tornadoes, insurance companies are high on our crap list. :D
 
niconx said:
Giant corporations shouldn't be allowed to get insurance for legal defense because they already have herds of lawyers working for them. Giant corporations need to be held accountable and if they screw up then their bank account should take a hit. Instead the insurance company is taking the hit for them. What a cop out.
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Then the insurance copany shouldn't offer the policy!
 
If they couldn't get insurance for it, then why did the company offer it. They enetered into the agreement, so they should keep their side of the bagin, unless they want to not do insurance at all anymore.
 
Sony1: We need to upgrade our software security.
Sony2: Don't do anything. We will invite someone to hack us. After we get hacked, we will let the insurance company pay for the security improvements. Problem solved.
Sony1: Oh, I see.
Sony2: I'll take care of it. (Gets some kids to play with the servers)
News: Sony been haxored!
Sony2: Here is the check from the insurance company. Go make the improvements.
Sony1: OK.
 
SparkedFire said:
Sony1: We need to upgrade our software security.
Sony2: Don't do anything. We will invite someone to hack us. After we get hacked, we will let the insurance company pay for the security improvements. Problem solved.
Sony1: Oh, I see.
Sony2: I'll take care of it. (Gets some kids to play with the servers)
News: Sony been haxored!
Sony2: Here is the check from the insurance company. Go make the improvements.
Sony1: OK.
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You are aware that Sony's server software being out of date was debunked a long time ago. It's well passed the time for us to pretend this hack was "self inflicted".
 
I skimmed an article on this. From what I recall, the insurer insures general coverage for Sony. They want to ask to be excluded from cyber stuff.
IANAL
 
GL (General Liability) - absolutely not covered

E&O (Errors & Omissions) - possibly covered, tho denial of coverage is more likely than not - highly unlikely that damages as the result of an "unsecured netwrok" is even an insurable risk - no one likely to write it & if anyone did, at such a premium rate that no one could afford it
 
You know, Iw as thinking that the only thing missing from this saga is more lawyers.

Problem fixed,
 
There is specific insurance available for cyber incidents, but afaik they still require you to do due diligence in securing your network. If they didn't have that specific type of coverage, I'm not surprised with the Insurance company trying to deny any damage. Not that I'm taking the insurance companies side, I'm not a big fan of them either and they will try to weasel out of coverage whenever possible, but if Sony didn't even buy coverage for network attacks then they shouldn't expect a payout either.
 
Adjuster: So what did you do to patch up your security when people told you what was wrong with it?
Sony: We sued the people who told us what was wrong.
Adjuster: Uhh...
 
Brad Grenz said:
You are aware that Sony's server software being out of date was debunked a long time ago. It's well passed the time for us to pretend this hack was "self inflicted".
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Regardless of whether or not it was up-to-date, it is wholly inappropriate to store user credentials in plaintext.
 
ir0nw0lf said:
Ugh, insurance companies. Us folks on the Gulf Coast after Ivan/Katrina and those in Alabama from the recent tornadoes, insurance companies are high on our crap list. :D
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I had a bit of roof damage from the passing tornado. The Allstate adjuster came out and they cut me a pretty nice check.

Had a roofer come out and look at it and recommend that it would be fine to just replace a few shingles that had gotten bent back, and that is what he would do if it was his house. $200 dollars later and my roof is just fine.

I did have the spare shingles though, so that probably cut the price down by about $50.

I have heard horror stories about State Farm here in AL though.
They are a bunch of scumbags.
I used to be with State Farm years ago. Then I get a bill one month and my rates had doubled.
I personally went to the office and asked them why my rates went up. They replied with. "The rates just went up."

They lost my business and I have steered other people away from them as well as getting people to switch from them to Allstate as well.

So yeah, you have sucky business practices and I have a bad experience with you, you will lose more than just my business.
 
^^^ true that,, it turns out... but based on who?? how can it truely be proven, did the group that got the info admit the info was encrypted?
 
If you're not willing to take Sony's word for it, or the word of the three security firms they hired to investigate the hack, or believe the major credit card companies and banks who don't believe the credit card data was compromised, I don't know what to tell you. Besides, it's not even clear the credit card data was even accessed. In fact, Sony has always said there is no evidence it was accessed, but they could not rule out the possibility that it was.
 
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