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No "Publication" of IBM's Lost Employee Data, So No Cyberinsurance Coverage

05.19.15

The Connecticut Supreme Court ruled that IBM was not entitled to insurance for magnetic tapes that fell off a truck since there was "no evidence that anyone ever accessed the information on the tapes or that their loss caused injury to any IBM employee." In the case of Recall Total Information Management Inc. et al. v. Federal Insurance Co. et al the court unanimously affirmed a lower court ruling that the Appellate Court:

…concluded that the loss of the computer tapes did not constitute a ''personal injury'' as defined by the policies because there had been no ''publication'' of the information stored on the tapes resulting in a violation of a person's right to privacy.

Judy Greenwald reported for Businessinsurance.com that a contractor for IBM:

…lost the computer tapes when they fell from its truck onto the roadside by a highway exit ramp in New York and were retrieved by an unknown individual in February 2007, according to court documents. The 130 computer data tapes, which contained personal information on more than 500,000 current and former IBM employees, were never recovered.

Another interesting case where cyberinsurance will not apply, but had the IBM employee data been published there would have been coverage.

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