Data breaches are persistent threats, and news reports of breaches of individual information and at companies across an array of sectors are seemingly nonstop. While network and information technology specialists work to identify and respond to incidents that compromise data security, companies’ insurance professionals must provide notice to the relevant insurance companies. Insurers, however, frequently deny coverage and institute declaratory judgment actions to avoid liability.
Hacker Attacks
A recent, high-profile legal dispute between Sony Corporation of America (and some of Sony’s affiliated companies) and Zurich American Insurance Company over data breach liability claims highlights the challenges companies confront to secure coverage for expenses related to cyber-risks. See Zurich American Insurance Company v. Sony Corporation of America, No. 651982/2011 (N.Y. Sup. July 20, 2011).
