LexisNexis® CLE On-Demand features premium content from partners like American Law Institute Continuing Legal Education and Pozner & Dodd. Choose from a broad listing of topics suited for law firms, corporate legal departments, and government entities. Individual courses and subscriptions available.
By Michael Kelley
With all of the data breach issues in the news, we thought that this decision might be of interest to you. The Connecticut Supreme Court, [subscribers can access an enhanced version of this opinion: lexis.com | Lexis Advance], has affirmed a lower court ruling denying coverage to IBM for more than $6 million in losses stemming from data lost in a highway incident. The Court ruled that two insurers had no obligation to cover IBM's losses when tapes containing employee social security numbers, birth dates and contact information slipped out of the back of a truck operated by an IBM contractor. IBM sought coverage under its commercial general liability policy, arguing that the losses arose from violations of a person's right to privacy. The court found no coverage under that section of the policy.
We have recommended for some time that those businesses concerned about covering data losses not depend on their commercial liability policies for protection. Instead, they should seek coverage under cyber liability or data breach policies. The situation involved here is so unusual that there is a question as to whether even cyber liability/data breach coverage would have protected IBM.
© 2015 McNees Wallace & Nurick LLC
Is That Covered is presented with the understanding that the publisher does not render specific legal, accounting or other professional service to the reader. Due to the rapidly changing nature of the law, information contained in this publication may become outdated. Anyone using this material must always research original sources of authority and update this information to ensure accuracy and applicability to specific legal matters. In no event will the authors, the reviewers or the publisher be liable for any damage, whether direct, indirect or consequential, claimed to result from the use of this material.
Read more McNees Wallace & Nurick LLC publications.
For more information about LexisNexis products and solutions, connect with us through our corporate site