An insurance claim worth about £2.3 million is being contested by a business insurer in the US after it denied liability for a data loss incident at the University of Utah two years ago.
This case is of international importance as its outcome could dictate legal precedents in other cases of insurance claims following on from data loss, theft and breaches.
Businesses will generally find that an insurance policy covering their operations might include cover for data loss and other data related claims, but if this case finds in favour of the insurer, data loss could become more costly than ever.
The University of Utah is seeking £2.3 million in order to cover the costs of a data loss which occurred in 2008. The incident involved the theft of tapes which contained computer backups of personal data relating to over two million patients of its Hospitals and Clinics department.
The data could be traced back over sixteen years, and it included financial information, sensitive personal data relating to medical conditions and analysis of demographics in and around the Salt Lake City area, making it a not insignificant incident.
The £2.3 million in costs were accumulated by the university after it set up support lines to cater to the affected citizens, in addition to getting in contact with all those involved and protecting them from identity theft via new insurance policies.
The theft of the data tapes took place not on university property, but from a car belonging to an employee of the storage firm contracted to protect the data. The car was parked outside an external data vault and so the question of blame is being contested.
The stolen discs were recovered relatively quickly, although the university believes that by exposing the data for any amount of time it was necessary for it to spend the money and take appropriate precautions.
A University of Utah spokesperson told Computerworld that he and his colleagues would be unhappy with any verdict which found in favour of the insurance firm in this case, as it would not only impact the university itself, but could possibly influence similar claims around the world.
