SGL Attorneys Bob Laurie and Beth Ahlstrand Obtained a Highly Anticipated Victory Before the Connecticut Supreme Court in a Data Breach Insurance Coverage Dispute

On May 18, 2015, the Connecticut Supreme Court affirmed a summary judgment ruling in the highly-watched case of Recall Total v Federal Ins. Co. Bob Laurie and Beth Ahlstrand represented Scottsdale Insurance Company (“Scottsdale”) in the case, which involved coverage under CGL and excess policies for a data loss incident. In the case, data tapes containing the personal information of IBM employees fell out of a transport van and were stolen off the side of the road. Following the loss, IBM expended nearly $6M to protect the identity and credit of its employees. The contractors that lost the tapes reimbursed IBM for the costs incurred and brought suit against Federal Insurance Company (“Federal”) and Scottsdale seeking indemnification. The trial court granted summary judgment in favor of both insurers. On appeal, the Appellate Court agreed with the insurers’ position that coverage was unavailable under either policy, as a matter of law, because the appellants failed to produce any evidence that a third party accessed the information on the tapes or that any IBM employee suffered any damages as result of theft. As such, there was no personal injury, because there was no publication resulting in a violation of a person’s right to privacy, as required under the Coverage B  “Personal and Advertising Injury” coverage grant. The Connecticut Supreme Court agreed, Per Curiam, and adopted the Appellate Court’s “[well-reasoned] opinion as the proper statement of the issue and the applicable law concerning that issue.” You can view the Supreme Court opinion here, and the Appellate Court opinion here.





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