Sony PSN Breach: Protecting Third Party Data

By Gareth Greaves-Milner
Gamers playing on their computer

The recent high-profile breach of Sony’s PlayStation Network has already seen the launch of claims against the company for damages in the US, and has been described as looking like “a very significant breach of data protection law” by the UK Information Commissioner.

A further unauthorised intrusion of Sony’s Online Entertainment service means that users of other networks, including PC gamers and those using Facebook, may now be affected.

In total, the data of some 95 million users could now be at risk.

As well as individual claims as a result of credit card fraud, such a breach could also have a significant impact on businesses responsible for collecting and handling individuals’ data, or providing platforms – e.g. games – where such data is collected, handled, transferred or used in any way.

The ultimate question such an incident gives rise to must be “How safe is the data my organisation is responsible for, and how can our reputation and bottom line be protected against claims occurring from misuse of such data?”

A Professional Indemnity Insurance (PII) policy will make provision for sums you are legally obliged to pay as a result of claims arising from breach of duty, breach of trust or breach of confidence and misuse of information or breach of privacy.

A PII policy written with games companies in mind should include a specific section of cover around data, to the effect that the insurer will pay claims for costs arising from the loss or theft of data for which you are responsible, or held to be responsible, resulting from incidents such as a hacking attack or virus.

Specialist insurers will also often include cover for incidental costs such as damage to a client’s website, or PR and brand protection fees arising as a result of a hacking incident.

Companies must remember that, even if they are not ultimately responsible for the security of a network or for a breach occurring, they may be ‘first in line’ as an entity for a claim to be pursued.

It is therefore essential that you are comfortable with the scope of your insurance cover, and that this protects your business as robustly as possible.

MFL always recommends ensuring your policy is written on the widest ‘civil liability’ basis to include cover for claims arising form matters other than strict negligence.

Policies cannot include cover for contractual penalties, liquidated damages, or fines imposed by government or other regulatory authorities.

If you would like further information or advice, please contact MFL for a no-obligation, confidential discussion about your requirements.

Notes to Editors

McParland Finn Limited (MFL) ~ Insurance For Your Reputation

  • is a leading specialist legal liability insurance broker operating from offices in Manchester and Leeds
  • Specialises in the analysis, management and insurance of professional risk for professional practices, science and technology companies and the individual partners, directors, officers and trustees who manage those businesses
  • Arranges a number of exclusive professional indemnity insurance schemes for the members of various professional institutes and associations
  • Acts as a consultant to various prominent bodies. By way of example:
    • MFL operates Professional Indemnity Schemes for the members of the Chartered Institute of Architectural Technologists and the Landscape Institute
    • We are a member company of both the North West Aerospace Alliance and Northern Defence Industries, and the preferred insurance partner for Techmesh, serving the IT & Digital sector, alongside The Sheffield Bioincubator and the East Midlands Incubation Network.

For further information please contact:

 Gareth Greaves-Milner

MFL Science & Technology Insurance Brokers

Suite 503, 2 Wellington Place, Leeds LS1 4AP

DDI 0113 366 2359


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