Sony insurer not interested in paying for the PlayStation Network hack

By Mike Flacy July 22, 2011

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One of the insurers that covered Sony during the four week PlayStation Network outage told a New York court that it shouldn’t be responsible for claims that occur in cyberspace. The issue is whether Sony suffered damages in the real-world for attacks that occurred in the virtual space. Zurich American is also suing co-insurers ACE Ltd, Mitsui Sumitomo Insurance and AIG to get a better understanding of shared responsibility covering potential Sony losses.

The insurance company brought this suit to court due to the 55 lawsuits filed in the United States over the outage. The majority of the lawsuits are related to the data loss that occurred from the PSN hacking in April 2011. One of the largest intrusions in history, the hack put confidential data from 77 million users of the PlayStation Network in the hands of hackers. Zurich American also intends to shift blame back to Sony and make the company liable for all future lawsuits related to the hack. The network outage is estimated to have cost Sony $171 million already.

The PlayStation Network fully came back online during the first week in June 2011. Sony hasn’t reported any new attempts to hack into the network, but it’s unclear if PSN is still a target. Other Sony properties had fell under siege such as a denial-of-service attack on the main Sony website. This attack was attributed to Sony’s pursuit of legal action against PlayStation 3 hacker George Hotz. CEO Howard Stringer believes that all the attacks were a result of Sony attempting to protect its intellectual property being video games.

If a court rules that Zurich American Insurance isn’t liable for cyberspace attacks, Sony will be faced with fighting the class-action lawsuits in the Unites States and abroad. In Canada, an Ontario woman filed a lawsuit on behalf of one million Canadian users for a massive $1 billion in damages.

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