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INSURANCE LAW: Supreme Court holds that IBM computer tape loss was not personal injury under liability policies

INSURANCE LAW: Supreme Court Holds That IBM Computer Tape Loss Was Not Personal Injury Under Liability Policies

Recall Total Information Management, Inc., contracted with IBM to store and transport computer tapes containing IBM employee personal information.  Recall subcontracted the transportation to another company, and the tapes fell from a truck and were lost. The transportation company named IBM and Recall as additional insureds, but the carriers, Scottsdale and Federal Insurance Company denied coverage.  The Appellate Court found that the loss of the tapes was not a personal injury under the policies because there was no “publication” of the information on the tapes violating a person’s right to privacy.  The Supreme Court affirms, adopting the Appellate Court ruling.  The Supreme Court clarifies the standard of review, noting that the appellant from a granting of summary judgment does not have the burden to prove that summary judgment was clearly erroneous; rather, the de novo standard of review applies.

Recall Total Info. Management, Inc., v. Federal Ins. Co., SC 19291 (May 26, 2015)