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New York Trial Court Denies Sony’s Claims against Primary CGL Insurers to Pay for Defense Costs Related to Cyber-Attack Litigation

by Steven D. Cantarutti
Coughlin Duffy LLP - Morristown Office

Kevin T. Coughlin
Coughlin Duffy LLP - Morristown Office

Robert J. Kelly
Coughlin Duffy LLP - Morristown Office

March 12, 2014

Previously published on March 3, 2014

On February 21, 2014, a New York trial court (Hon. Jeffrey K. Oing, J.S.C.) in Zurich Amer. Ins. Co. v. Sony Corp. of Amer., et al., Index No. 651982/2011 (N.Y. Sup. Ct., N.Y. Cnty.), made a significant ruling in the area of cyber risk coverage. The Court rejected claims by Sony Computer Entertainment America LLC (“SCEA”) and Sony Corporation of America (“SCA”) (collectively, “Sony”) to have their respective primary general liability insurers -- Zurich American Insurance Company (“Zurich”) and Mitsui Sumitomo Insurance Company of America (“Mitsui”) - pay for Sony’s defense costs incurred in numerous pending underlying class action lawsuits. The lawsuits arise from cyber-attacks that occurred against Sony’s online networks in or about April 2011, which resulted in access to information belonging to over 100 million of Sony’s customers and users -- one of the largest reported data breaches of information at that time. The trial court’s decision is the first of its kind by a New York court that addresses whether a comprehensive general liability (“CGL”) policy may be liable to cover claims involving cyber-related risks. Zurich is represented by Coughlin Duffy LLP.


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