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Court say insurance companies don't have to cover data recovery costs after security breach

The Ohio Supreme Court has ruled an insurance company is not liable to cover a software company’s data recovery costs after a security breach.

Previously, a lower court had ruled Owners Insurance breached its contract with the software company EMOI when it refused to cover the costs of a data breach.

Owners’ attorney Erin Moore had argued the physical data itself was never lost or damaged – just inaccessible for a time.

“It’s like losing the keys to your safe deposit box or your safe. In this situation, all of the stuff that’s in that box is still there.”

In a decision earlier this week, the state’s high court reversed the judgment of the Second District Court of Appeals that claimed Owners acted in bad faith by failing to pay for costs incurred to recover the breached data.