JAPAN Law and Practice Contributed by: Shinichiro Yamashita and Naruku Okamoto, Hiratsuka & Co
of individual insurance contracts, such as disputes over insurance coverage, exclusions in insurance poli- cies, misrepresentation, or trends in insurance claims. 8.3 Data Protection Laws In Japan, the Personal Information Protection Act came into full effect in 2005, making it necessary for companies to protect personal data. The amended Act, which came into force in 2017, tightened regula- tions by requiring security measures for personal data and stipulating that prior consent from the data sub- ject is required when providing personal data to third parties. The amendment enacted in 2022 imposed a reporting obligation in the event of a personal data breach, and explicitly prohibited the improper use of personal data. Insurance companies are subject to these regulations, under which they are required to strengthen their infor- mation management systems. However, it is unlikely they will have an impact on underwriting decisions, the processing of insurance claims or litigation strat- egy. Furthermore, commercial enterprises other than insur- ance companies are also subject to these regulations, which may serve as a basis for commercial enter- prises to be held liable for damages to individuals. Insurance companies provide cover to commercial enterprises that have taken out personal data breach insurance or cyber insurance. Underwriting decisions, insurance claims handling and litigation strategies are considered to be the same as for standard insurance. There is no indication in published court precedents or other published materials that personal data breach insurance or cyber insurance are treated differently. 8.4 Data Centres Risks associated with data centres include the main- tenance of power lines and substations, the stable supply of electricity, increased electricity demand due to cooling equipment, and the ability to maintain operations during disasters. Should these risks mate- rialise, they could result in damage such as system downtime, data loss or business interruption. There have been no specific reports of insurance companies underwriting cover for data centre inci-
dents or paying out claims in such cases. However, it is believed that insurance companies offer prod- ucts covering system downtime, data recovery costs, incident response costs and business interruption through existing policies such as cyber insurance, error and omission insurance, business property insurance and comprehensive business insurance. Furthermore, should an incident occur, it is expected that claims would be processed in accordance with standard procedures. 8.5 Social Media Risk It appears that there are no insurance products in Japan that cover the condition of social media addic- tion itself as a loss. In cases where an individual becomes unable to work due to a mental illness, they may be covered by income protection insurance. In the event of death resulting from a mental illness, a claim may be covered by life insurance; however, the issue of a suicide exclusion clause may arise. It is unclear whether there are any insurance products in Japan that cover the liability of platform operators who have been sued by individuals suffering from social media addiction and have paid compensation. Comprehensive corporate liability insurance is the most likely option; however, whether it covers per- sonal damages arising from social media addiction requires careful examination of the wording of the respective insurance policies. It may also be possible for such claims to be covered by error and omission insurance for IT operators. Should a company direc- tor be sued, there is scope for directors’ and officers’ insurance to apply. Thus, it is possible that insurance cover could be confirmed in relation to existing insur- ance products. However, no such litigation has been reported, and there are no known cases in which a Japanese court has ruled on this matter. 8.6 Next Generation Nuclear Whilst next generation nuclear technology should be operated safely, the regulatory framework must be designed with the possibility of accidents in mind. In Japan, compensation for nuclear damage is governed by the Act on Compensation for Nuclear Damage. It is reasonable to assume that this Act will also apply to damage caused by next generation nuclear technol-
172 I NSURANCE L I T IGATI O N 2026
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