American International Group Inc. and Axis Capital Holdings Ltd. are among insurers for the company that owns AshleyMadison.com, the adultery website hacked in a breach that exposed more than 37 million users, people familiar with the policies said.
AIG provided directors and officers coverage, while Axis insured the firm against cyber attacks, said the people, who asked not to be identified discussing private contracts.
Lawsuits against the website’s parent, Toronto-based Avid Life Media Inc., include allegations that the company failed to notify users promptly about the threat and release of personal information. Law firms seeking to represent victims claim more than $500 million in damages. Avid Chief Executive Officer Noel Biderman stepped down a week hackers released the personal information.
“Numerous class-action litigation cases that have been filed in the AshleyMadison and similar situations demonstrate the need for an analysis of existing insurance coverage,” Kevin Kalinich, leader of the cyber risk team at insurance broker Aon Plc, said in an e-mail. He said some companies have been seeking to introduce policy exclusions to limit risks.
Matt Gallagher, a spokesman for New York-based AIG, declined to comment.
Axis doesn’t disclose clients as a matter of policy, said Michael Herley, a spokesman with Kekst & Co. for the insurer.
Messages left with AshleyMadison’s media operation weren’t immediately returned.
AIG is the largest commercial insurer in the U.S. and Canada. Its directors and officers coverage protects corporate officials against lawsuits. Bermuda-based Axis is the firm that lost to Italian investment firm Exor SpA this year in a bidding war for reinsurer PartnerRe Ltd.
–With assistance from Sophia Pearson in Wilmington, Delaware
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