The Connecticut Supreme Court has upheld lower court rulings that denied insurance coverage to a company seeking payments to cover the costs of a data breach. But the brief, unsigned opinion may not provide the legal guidance sought by insurance, business and consumer groups that were closely following the case in the wake of other recent breaches involving retailers and health care benefits providers.
One reason for the possible uncertainty is the unusual fact pattern in the case. There were no hackers or computer viruses involved in Recall Total Information Management v. Federal Insurance Co. Instead, computer tapes that belonged to the IBM Corp. simply fell out of the back of a truck onto a New York highway in 2007. The discs contained sensitive, unencrypted information for 500,000 IBM employees.
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