Federal Court Rules California General Liability Insurer Must Cover Data Breach Costs

A federal court has decided against a California insurance agency, ruling the company's general liability insurance policy must cover defense costs and damages from two data breach suits against Stanford Hospital and Clinics in Palo Alto, Calif., and health IT firm Corcino & Associates, according to a report in Lexology.

Before the U.S. District Court for the Central District of California, the Hartford Casualty Insurance Company argued it should not have to defend and indemnify Stanford and Corcino in suits brought forth by patients whose information was exposed in a data breach, as the organizations' general liability policies excludes coverage arising from privacy violations, according to the report.

The court rejected Hartford's claim, ruling that because California has long recognized the right to medical privacy under common law, the breaches represent a common law violation and must be covered, according to the report.

More Articles on Data Breaches:

Another Massive — and Totally Preventable – HIPAA Breach
Stolen Laptop at UC San Francisco Medical Center Compromises Health Information of 3,500
Don't Let Human Error Compromise Patient Data

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