AfterDawn: News

Sony insurer doesn't want to pay, following PSN breach

Zurich American Insurance has sued today, asking a court to declare that it does not have to pay to defend Sony against class-action suits related to the PSN security breach.

The company does not want 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."



Additionally, the insurance company has sued Mitsui Sumitomo Insurance, AIG and ACE asking the court to "clarify their responsibilities under policies" written for Sony.

Adds attorney Richard Bortnick, of a firm not involved with the case (via Retuers):

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.

The company plans to argue that the general liability insurance they wrote for the electronics company does not cover cyber attacks.

In April, a massive attack on the PSN managed to net hackers personal details on 100 million users. Sony has the attack will cost them $178 million this year and is looking for insurers to help pay.

Written by: Andre Yoskowitz @ 23 Jul 2011 21:49

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• 13 comments

• brockie

  is it worth having Insurance these days the rats are always trying to get out of paying.

  23.7.2011 22:47 #1

• PubeBrush (unverified)

  Originally posted by brockie: is it worth having Insurance these days the rats are always trying to get out of paying. Insurnace compaines are just a bunch of edited by ddp trying to make money.
  If they suspect that you will actually need their services, they will not insure you and if you are insured and you actually need them, they will do everything they can to pay as little as possible or not at all.

  24.7.2011 00:13 #2

• KillerBug

  I agree that insurance companies are not better than the banks...and this claim that cyber attacks are not covered is BS.
  
  However, I do think that they should not cover Sony because the attack would not have been successful if sony had not fired their most talented security specialists (and even the guys smart enough to at least enable updates).
  
  Of course, sony brought the attacks on themselves; it was just another strike in a back-n-forth between Sony and their own customers...
  
  Sony sells the PS3 with linux support claiming it can be used for homebrew and that it will never be released. For absolutely no reason, they block access to the RSX, preventing all 3D homebrew.
  
  GeoHot enables the RSX.
  
  Sony removes linux support, claiming it is to stop piracy. Actually, it is to help them cut staff...it seems that this is about the time that regular maintenance and updates stopped (although they would still take the network down occasionally to make it look like they were doing updates).
  
  The community starts working on hacking the system to get OtherOS back...but the first people to get it right start selling jailbreaking tools for playing backups because that is where the money is(removing OtherOS certainly did not prevent piracy), and soon people like GeoHot and Graf are returning OtherOS to the PS3.
  
  Sony sues geohot and graf for returning OtherOS.
  
  Anonymous attacks sony for attacking geohot and graf, but backs off because they were hurting the users too much.
  
  Some anonymous group (not Anonymous) attacks sony with a different method and happens upon credit card numbers. Sony waits a week to tell people that their cards may or may not have been stolen, and the PSN is down for a month.
  
  Sony finally fixes the PSN and they give away software...this actually increased software sales because people bought the sequels.
  
  There are a lot of things in there that Sony did wrong...things that they knew were wrong when the did them...but the big one was waiting a week...all the other issues could be blamed on ignorance or cost-cutting...there is no excuse for waiting a week to alert people about stolen credit cards, and then not even emailing them...just posting the news to a blog that very few users read.
  
  Sony brought this on themselves, and most insurance does not cover attempted suicide.
  
  I really hope the get let out of their agreements..."We have insurance" should not be your only web security.
  

  
  

  24.7.2011 02:17 #3

• LordRuss

  Insurance is the biggest legalized scam on the planet; then to force the people (in certain states & countries) to purchase plans/packages for particular reasons just because 'they' said so is racketeering of the highest order.
  
  We've all seen the fallout once a hazard comes about that a insurer is finally called upon to 'pay-up' (all perfectly legal); they'll fight it tooth & nail. Fighting & bitching that the families of the flood plane did a rain dance because a drought, did it wrong & that's why their house got washed away. I.e., they ain't paying. Not that I pity Sony in the slightest, but why would they treat Sony any differently?
  
  Sony's ability to be purely negligent like that of BP in putting proper safety precautions in place like their supposed to also kind of nullifies one's policy as well. If memory serves me correctly.
  

  http://onlyinrussellsworld.blogspot.com

  24.7.2011 10:56 #4

• themind

  I wonder if Afterdawn has a policy of giving recognition to the person or group that broke this story? Some sort of SOURCE so one could do more research into the story.

  24.7.2011 13:58 #5

• Mysttic

  I have to admit I dont buy insurance because nothing is covered. Not worth it. I still drive my car, despite it not considered legal with out it. The only time I buy my car insurance is to renew my plate sticker, than after it expires fuck it. Biggest BS on the planet, and the reason why the gov't won't change it, is because its their biggest cash cow, prolly bigger than oil.

  25.7.2011 14:31 #6

• LordRuss

  @Mysttic... yeah, but that still scares the hell out of me! Some states even have a 'watchdog' thing that alerts the police when your insurance has expired. Most cases they don't do anything other than stop you for a seat belt & then tag you. In others they will come to your house & literally fine you at the front door even though you're not even within 20 feet of the car.
  
  Like you stated, total scam.
  

  http://onlyinrussellsworld.blogspot.com

  25.7.2011 17:22 #7

• Interestx

  I can see both sides in this criticism of insurance companies, some of it is valid but it's way too broadbrush & too much of a silly caricature.
  
  I know.
  There are occasions when it absolutely is not a scam and having it (and the person who had a road accident with you having it too) makes all the difference in the world.
  Proper insurance is the difference between getting a normal life back on track after needing months off of work.
  Believe me.
  
  But in this case Sony's security appears to have been so ridiculously ineffective (despite their public boasting) that I am not surprised that their insurance company is questioning their responsibility in paying for it.
  Gross negligence and laying yourself wide open to loss is unlikely to be looked at sympathetically by any insurer.
  
  
  

  25.7.2011 19:18 #8

• Jeffrey_P

  Originally posted by Mysttic: I have to admit I dont buy insurance because nothing is covered. Not worth it. I still drive my car, despite it not considered legal with out it. The only time I buy my car insurance is to renew my plate sticker, than after it expires fuck it. Biggest BS on the planet, and the reason why the gov't won't change it, is because its their biggest cash cow, prolly bigger than oil. You do not have auto insurance?
  
  You really don't need auto insurance in most states if you have at least (at one point in time) was a minimum of ~200k in the bank to cover liability collision and so on.
  In reality, not many people can open an account with that much cash just to cover bad issues.
  
  I do agree insurance companies are a huge scam.
  They spend so much $$ on advertizing then try to pawn it off on insurance fraud that it is almost funny.
  Jeff

  25.7.2011 21:20 #9

• DVDBack23

  Originally posted by themind: I wonder if Afterdawn has a policy of giving recognition to the person or group that broke this story? Some sort of SOURCE so one could do more research into the story. Unless you have a better one than the Reuters story linked in the article, not sure what the problem is?
  

  AfterDawn News
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  26.7.2011 01:11 #10

• themind

  There was no link in this article for three days. And yes the new Reuters link looks good.
  

  26.7.2011 12:34 #11

• xboxdvl2

  i live in australia the only car insurance we are required to have is compulsary 3rd party which in included in the rego.i didnt insure my car.2 reasons why not (1 it costs $1800 which means it would be replacable,2 i dont think insurance would cover my lawyers fees if someone hit my car and i physically beat them and got arrested).when i was 12 years old insurance company SGIC tryed to sue me,basically i was crossing the road on the way to school and was hit by a car that i suspect was speeding.the car had $5000 worth of damages or so they claimed.
  
  *back on topic*.as for sony and insurance im sure there is some loop hole in the policy which will stop sony getting paid.
  

  R.I.P. mr 1990 ford falcon.got myself a 1993 toyota corolla seems to run good.computers still going good.

  27.7.2011 00:59 #12

• LordRuss

  @xboxdvl2... OM'Fing'G!!! I don't know what the cost of living is in comparison to the US, but unless that has something to do with your age & all the other garbage they do to knock down the cost... no wonder you don't pay. I wouldn't either.
  
  As for the back on topic... One of a couple of things... Either you're spot on & the loop hole is there and the insurance company just lost a multi-million dollar client (which is typical. They'd rather loose the client & keep the money) or Sony will sue the crap out of them & both companies will have healthy tax write offs at the end of the whatever quarter they decide to pull this scam. Which is equally stupid because it'll cost as much or more to sue than the payoff.
  
  Sometimes I wonder why we try...
  

  http://onlyinrussellsworld.blogspot.com

  27.7.2011 13:44 #13