[babar]

Shouldn't someone have to show actual damages in order to sue? The California Unfair Competition Act seems to be about unlawful, unfair or fraudulent business practices - I don't immediately see how that is relevant.

My guess is this is going to just force Dropbox into some kind of settlement because it will be cheaper than fighting it. And the lawyers promoting this get a nice cut, of course.

Does corporate insurance cover this sort of thing? How does a company protect itself from these kind of lawsuits?

[tezza]

A friend of mine was a corporate insurer.

Whenever a large firm like dropbox made a clanger and got sued, the insurers would work out how much negligence there was involved.

The insurers discussed the issue with the company and said "you were negligent here, here and here" therefore "we're only going to cover you to X<100% of your public liability"

So negligent actions are not covered by insurance, and some portion will still have to be coughed up.

[dctoedt]

> So negligent actions are not covered by insurance

Depends on the kind of insurance. E&O (errors & omissions) most assuredly does cover negligence.[1]

[1] http://en.wikipedia.org/wiki/Professional_liability_insuranc...