Everyone knows that the Sony breach was different than, say, the Target or Home Depot breach because of the damage that Sony is still, 10 weeks later, trying to recover from.
But now, the insurance experts are adding yet another wrinkle – thanks Sony.
According to the Hartford Courant, Sony may break new ground in the insurance world too.
Cyber insurance policies tend to be a bit vague on coverage in case of acts of war or terrorism. Since the government has blamed North Korea for the attack, one might call it an act of war or terrorism. The President was careful to call it cyber vandalism. I suspect a number of attorneys argued about that decision and part of that decision may have been to try and avoid trouble with Sony’s cyber insurance policy. Of course, whether the President calls it vandalism has little impact on what the insurance company calls it and while we have no indication yet that Sony’s insurance carrier is going to try and wiggle out of their policy, they still may. Writing a $60 million check does cause people to pucker up.
So then, you might rightfully say, if it is terrorism, did Sony have a terrorism policy? That issue has not come up yet, so we don’t know.
And terrorism insurance is designed to cover losses like the World Trade Center on 9-11, not a hacker erasing some computer disks and posting your new movies on an underground message board.
Suffice it to say, this is all new ground.
It certainly would be smart for companies and their insurance brokers to review their coverages and exclusions in light of this. And, at renewal time, it behooves them to read the policy carefully.
Whether Sony’s insurer will try playing this card is unknown – I guess we will have to wait and see. And even if they do, it will take years to sort out.
One more time Sony is breaking new ground.