Hanover Insurance Group Inc. units no longer have to defend an automotive accessory supplier against claims under Illinois’ Biometric Information Privacy Act (BIPA), after a federal court reversed a prior ruling in light of new appellate guidance. The decision reflects evolving case law around whether general liability insurers must cover BIPA suits.
The reversal follows a Seventh Circuit ruling that clarified an “access or disclosure” exclusion bars coverage for claims involving confidential personal information. The district court had initially ordered Hanover units to defend, but reconsidered that decision after the appellate precedent shifted the interpretation of policy exclusions.
This outcome continues a series of rulings limiting insurance coverage for BIPA claims. Earlier this year, courts found that Ohio Security Insurance was not required to defend a biometric privacy case, and another insurer won a reprieve from BIPA coverage. At the same time, judges have occasionally held insurers liable, such as in a case where a company was found on the hook in a BIPA class action.
Observers note that the trend is chipping away at liability coverage for biometric privacy claims. As ID Tech has reported, recent rulings have narrowed insurance protections, leaving employers and vendors more directly exposed to BIPA risk.
For companies deploying biometric systems, the Hanover ruling underscores the importance of carefully reviewing insurance policies and anticipating exclusions. Businesses may face greater financial exposure if insurers successfully avoid coverage, especially in Illinois where BIPA litigation remains active.
Source: Bloomberg Law
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By the ID Tech Editorial Team
