Sizing Up Cyber Risks after the Sony Breach
From: Insurance Litigation & Regulatory Law Blog
by Travis Wall
Sony’s most recent data breach underscores the difficulties in underwriting and insuring cyber risk. Sony incurred losses that were surprising in both their scope and type. The company already is a defendant in at least four new lawsuits concerning the disclosure of employees’ confidential information. In addition to potential liability, Sony suffered substantial first-party losses that may be difficult to quantify, including forensic costs, reputational injury, and business interruption losses.
According to published reports, Sony may have $60 million in cyber insurance to mitigate these losses. Even if this figure were true and the cyber policies applied to the breach, Sony’s insurance probably would cover only a fraction of its actual damages.
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