Sony legal threat sparks warning

Brand owners are being urged to study the small print of their insurance contracts after one of the companies which covers Sony started legal action to avoid paying compensation for its recent mass data breach.
According to reports, Zurich American Insurance is going to court to protect itself against defending Sony over the hack attack which saw personal details of more than 100 million customers compromised.
The company has requested relief from indemnifying Sony against claims “asserted in the class-action lawsuits, miscellaneous claims, or potential future actions instituted by any state attorney general”.
The insurance giant claims it only covered Sony and its users against “bodily injury, property damage or personal and advertising injury”. Court documents suggest that the firm has been the subject of 55 class-action complaints so far.
One insurance industry insider told DecisionMarketing: “Sony could end up paying out millions of pounds in compensation if it transpires that customers’ banking and personal details have been lost; a move which could set a legal precedent. I would advise all companies to study their insurance documents to check exactly what they are covered for if customer data is stolen.”
When news of the breach at Sony PlayStation Network and Sony Computer Entertainment first broke, the company faced a barrage of criticism on a number of issues, including on the delay between discovering the problem and notifying customers, Sony bosses’ lack of public comment, the dearth of updates as to when service would be restored, and the confusion over exactly what had been stolen.
Sony tried to fight off legal action with a compensation package offering two free games out of a choice of five, although this sparked complaints that most of the games people have already owned, completed and sold on.
One user compared the welcome back to the sort of welcome you might get at Fawlty Towers, others were even less complimentary.

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