Will Insurance Come to the Rescue in Biometric Data Handling Claims? New Privacy Laws Could Be Kryptonite for Liability Coverage

Risk & Insurance

PUBLISHED ON: June 15, 2023

We are halfway through 2023, and it’s already been another blockbuster year in the biometric litigation universe.

The main characters are back — the Illinois Biometric Information Privacy Act (“BIPA”) and the justices of the Illinois Supreme Court. And the script has not changed much — a business scans workers’ fingerprints or retina, a worker brings class action seeking hundreds of millions of dollars, and the business’s insurance company disappears without a trace.

But thanks to a (dynamic) duo of decisions from Illinois’ highest court, the stakes have never been higher. Adding to the complexity, the action is no longer contained to a single statutory scheme, as a new challenge to a previously untested law has arisen in New York City, and a potential new threat to companies lurks in the New York state legislature.

As for whether insurance might come to companies’ rescue and save the day, courts thus far mostly have supported coverage for BIPA claims, but new policy exclusions are on the horizon. Policyholders must remain vigilant, look to their current insurance if exposed to liability, and consult experienced brokers and insurance counsel when renewing policies or obtaining new coverage.

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