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Illinois Supreme Court ruling in biometric data privacy suit puts insurers on the hook

Illinois Supreme Court ruling in biometric data privacy suit puts insurers on the hook

West Bend Mutual Insurance Co. is obliged to defend Krishna Schaumburg Tan Inc. from allegations it violated Illinois’s Biometric Information Privacy Act (BIPA), the State Supreme Court has ruled, Business Insurance reports, in a case which could set a precedent for how insurance policies are applied to BIPA.

The ruling upholding a lower court’s previous decision is based on the finding that the original compliant by plaintiff Klaudia Sekura potentially falls within West Bend’s two business owners’ liability policies, because the complaint alleges a nonbodily personal injury or advertising injury. An exclusion in the coverage based on violations of statutes does not apply to BIPA, according to the ruling.

The State Supreme Court also agreed with the lower court in ruling that the defendant’s alleged sharing of biometric data with its technology vendor counts as ‘publication’ under West Bend policies, which may violate the plaintiff’s privacy rights.

The suit has been remanded to continue.

Insurers take warning

Citizen’s Insurance Co. argued to an Illinois federal judge that its policy exclusions block coverage of alleged violations of BIPA as part of a biometric employee time and attendance system by one of its customers, Law360 writes.

Restaurant franchisee Francesca’s Midwest Holdings Inc. argues the commercial general liability policy in question does not explicitly exclude biometric data privacy claims, while the insurer argues that the claims do not fall within the covered area of ‘personal or advertising injury,’ an argument which may be under threat with the above Krishna ruling.

Citizen’s also argues that claims against it are blocked by an employment-related conduct exclusion and a confidential information-recording exemption.

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