Sony’s legal woes are mounting

Like a pack of wild dogs on heat. Get it? ‘Cause their legal woes are mounting. It’s a pun. Never mind.

We all know Sony got themselves into a bucket load of trouble a few months ago when they allowed their crappy network security to be hacked, thereby allowing the hapless, naked details of more than 70 million PlayStation Network user accounts to be stolen. A few days later they realised that another couple of million accounts had been stolen as well, this time from Sony Online Entertainment users. It was an unmitigated corporate disaster and without a doubt the biggest PR cluster-f*** Sony has ever had to endure.

Since then, the Japanese company has had a total of 55 class-action lawsuits filed against them by various individuals and groups. Now it turns out that their insurance company, Zurich American, is refusing to cover them.

The moment a company gets sued, they turn to their insurance company to deal with potential payouts. This falls under something known as general commercial liability, whereby any legal action brought against a company will be paid out so long as that company has insurance that falls under the general commercial liability umbrella.

Zurich American is maintaining that it is under no obligation to cover Sony because the class-action lawsuits filed against the company do not involve “bodily injury, property damage or personal and advertising injury”. The only things that have been lost by Sony customers are personal details; this is the reason there are class-action lawsuits being filed in the first place. As such, Zurich American is telling Sony to dream on. The insurance company has filed court papers in an attempt to get legal backing that condones their rejection of Sony’s insurance claims.

If Zurich American is successful, and it’s likely that it will be, then Sony will be on its own in paying the people who are suing them. That could add up to hundreds of millions of dollars.

Source: Reuters [via: Kotaku]

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