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I get this failure message several times a week on HTC 8X. It doesn't seem to be fatal and sometimes the phone recovers itself from it or other times I have to reboot. I think it is somehow associated with poor signal reception problems. Anyhow it's annoying and is my only detraction to my Windows Phone.
Hello DanDuna, let's solve this mystery! Have you tried powering off and removing the Sim card to see if there are any scratches or if it fits within the tray without movement? Try testing in Safe Mode to see if error appears: http://vz.to/1lgrhf3 You may want to test with an alternate sim card as well. Keep us posted!
WiltonA_VZW
VZW Support
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I had read where some users were sticking tape to the top of their SIM's and it was working. I can't remember if that was on here or elsewhere. If I can find it, I will reply.
I found it in this WPCentral thread (Windows Phone Central Forums). Hopefully it works for you. Solution may not be until page 2 or 3, but read over the forum. Tons of people were having this problem - me included until I broke my screen and bought a Nokia 822. I have since traded the 822 in for the Icon.
Thank you for your link to the Windows Phone forum on the subject. I found the information presented interesting and helpful. I decided to try the tape layer on the SIM. I removed the SIM, cleaned the contacts and then applied a single layer of tape on the back side of the SIM. After reinstallation I have had NO SIM failures over the course of 2 weeks now. I think that must be the best work around solution to an HTC design problem.
Glad to have helped. I hope it works well for you!