Appellate court says insurers in BIPA case not liable; 2 more insurers file lawsuits

Court battles between defendants and their insurers in U.S. biometric data privacy cases are not common and don’t get the attention that consumers’ original complaints do, but they can be momentous.

It’s understandable that an insurance company would do what it can to avoid paying a settlement in the hundreds of millions of dollars. They don’t get rich on the premiums people pay. They get rich by not paying on claims.

Two cases in the state of Illinois alleging violation of its Biometric Information Privacy Act show how this is playing out.

In the first instance, a state of Pennsylvania insurer has begun the process of getting itself off the hook for a BIPA settlement. The second involves an appellate court decision that could make the Pennsylvania insurer happy.

Pennsylvania Manufacturers’ Association Insurance is suing Fidelitone, which was a client when it allegedly violated BIPA. The putative class of Illinois residents that claimed the violation in 2021 is being sued by PMA, too, according to trade publication Law360.

PMA says the multiperil commercial policy it sold to Fidelitone, a supply chain management company, had four pay-off exclusions that would free it from responsibility in the BIPA case. There are other claims the insurer makes in its argument, but the bottom line is that it wants no part of the case.

It is not clear when the judge hearing PMA’s complaint will decide but that could be just as well.

The state’s First District appellate court last month said another BIPA defendant, packaging company Visual Pak, cannot make two insurance firms pitch in on a $19.5 million settlement, part of a case filed in 2020.

Executives at Visual Pak agreed to pay $3.5 million of the settlement, maintaining that its policies with National Fire Insurance of Hartford and Continental Insurance require them to pay the balance.

A federal court had previously decided that the insurers had an obligation to pay based on broad definitions that the higher court rejected.

According to Law360, the appellate court said that the lower court’s reading isn’t “an accurate reflection of Illinois law.”

A deeper look at the case history has been posted by the trade publication ALM Property Casualty.

Article Topics

biometric data  |  biometric identifiers  |  Biometric Information Privacy Act (BIPA)  |  biometrics  |  lawsuits  |  time and attendance