In Great Britain, they called it “The News andScrews.” Now that the media outlet truly is screwed,they're calling it toast.

In case you haven't been following the ongoing scandal at theRupert Murdoch-owned News of the World tabloid, here's a quickrecap—and yes, there is an insurance angle, because this is a taleof corporate accountability, cyber risk and a total disregard ofrisk management basics.

It all began when word leaked out about reporters at the168-year-old tabloid trolling for stories by hacking into theprivate cell phones of celebrities, political figures, deadsoldiers, terrorist victims–and a missing 13-year-old girl whoturned out to have been murdered. That last little indiscretionpushed the incident way beyond a breach of journalistic ethicsand cyber privacy violations into the realm of destroyingevidence and tampering in an ongoing criminal investigation.

The public outrage got so bad that Murdoch completely pulled the plug on the News of the World,which printed its last issue on July 10.

Obviously, this isn't the end of the saga. Over the last fewdays, Murdoch's attitude has shifted from defiance tohumility as he's embarking on a public- relations-driven effortof apologizing to the family of the murdered girl andaccepting the resignation of Rebekah Brooks, lead editor of the tabloid atthe time of the hackings. Brooks was even arrested and freed onbail over the weekend.

Most recently, Sean Hoare, the News of the World reporter whowas the whistle blower on the phone hacking story, was found dead on Monday, July 18.

But the nicemaking and backpedaling comes too late tosalvage the News—and also scotches the deal Murdoch wastrying to swing to purchase British Sky Broadcasting Group.

What does all this mean for insurance? All I can say is I'd hateto be the broker who placed the media liability insurance for Newsof the World.

Media liability insurance provides typically providesthird-party coverage against libel, slander, defamation ofcharacter, copyright, trademark and patent infringement, personalinjury liability, invasion of privacy claims or unfair competitionclaims. I doubt there is coverage for deliberate acts of privacyinvasion.

And although the trail of guilt is a long way from clear, it'salready obvious that the hacks are not the act of a few loosecannons on the News staff. If anything, the practice was known, ifnot condoned or even implemented by, the News' senior editorialstaff. Again—I don't think there's enough D&O coverage in theworld to mitigate any top-down decisions that might be at issuehere.

Is spying on sources corporate policy at the Murdoch enterprise?How far up the food chain will the guilt be traced? Will the dirtydoings at the News of the World taint other Murdoch holdings,including the venerable Wall Street Journal—wherepublisher Les Hinton just resigned? Stay tuned.

Back in 1984, Murdoch, in his earliest bids to becomethe King of All Media, bought the Chicago Sun-Times, in a movethat caused much angst in the journalisticcommunity. Legendary Chicago newsman Mike Royko, then acolumnist for the paper, wrote, ”No self-respecting fish wouldwant to be wrapped in that kind of paper.” He also observed ofMurdoch, “His goal is not quality journalism. His goal is vastpower for Rupert Murdoch, political power.”

At a time when instant interconnection is a given, and theconvergence of news and entertainment, the private sector and thegovernment, is increasingly blurry, Royko has proven to havebeen more prescient than he would have ever dreamed.