An Illinois federal judge ruled in favor of an insurance company, Citizens Insurance Co. of America, stating that the company does not have to defend a condiment manufacturer, Mullins Food Products, in a lawsuit. The lawsuit against Mullins Food Products claims the company violated Illinois’ Biometric Information Privacy Act (BIPA) by improperly handling biometric data like fingerprints and handprints.
Insurance Policy Exclusions Affect BIPA Lawsuit Outcome
The judge’s decision was influenced by two specific exclusions in Mullins Food Products’ insurance policy with Citizens. One exclusion is about the illegal recording and sharing of information, and the other is about improperly accessing or revealing private or personal information. The judge reconsidered an earlier decision from July 31 that had gone against Citizens, now agreeing with the insurance company based on a similar case decided by the Illinois Court of Appeals in December 2023.
Employee’s Lawsuit Sparks BIPA and Insurance Coverage Debate
The lawsuit in question was filed by Ricardo Galan, who worked at Mullins from August 2016 to July 2019. Galan’s lawsuit, which he filed in state court in February 2018, claims that Mullins required employees to use biometric identifiers like fingerprints or handprints for timekeeping purposes and then unlawfully shared this information, violating BIPA.
Understanding BIPA’s Impact on Businesses and Litigation Trends
BIPA is known for its stringent regulations on the collection, use, and storage of biometric information, such as fingerprints, facial recognition, and other unique biological identifiers. Since its enactment in 2008, BIPA has gained a reputation for its tough stance, primarily due to its provision allowing for private lawsuits against companies that fail to comply with its requirements.
The Ripple Effect of BIPA on Insurance Companies and Policy Coverage
BIPA has significantly impacted insurance companies like Citizens Insurance Co. of America, particularly those providing liability coverage to businesses. As companies face legal challenges for allegedly mishandling biometric data, many turn to their insurers to cover the costs of defense and any potential settlements or judgments.
Navigating Insurance Disputes in the Age of Data Privacy Laws
Insurance policies often contain various exclusions that insurers argue preclude coverage for BIPA violations, such as exclusions related to the distribution of material in violation of laws or the handling of confidential or personal information. These disputes have not only added another layer of complexity to BIPA litigation but have also prompted businesses and insurers alike to reevaluate the terms and conditions of liability insurance policies in the context of emerging data privacy concerns.
Source: Business Insurance
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February 29, 2024 – by the FindBiometrics Editorial Team
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