Two units of Nationwide Insurance are required to defend an automotive accessory company in Illinois against claims under the state’s Biometric Information Privacy Act (BIPA), after a federal court declined to dismiss the coverage demand.
The decision underscores ongoing uncertainty about whether general liability and professional liability insurers must provide defense obligations in biometric privacy litigation. Nationwide’s insurers argued that certain exclusions applied, but the court found that dismissal was premature.
This case fits into a broader pattern of litigation over BIPA coverage. Courts have recently ruled that Hanover Insurance was not required to defend a supplier in Illinois, while Ohio Security Insurance also escaped liability. In other cases, insurers have won reprieves, such as in a ruling relieving coverage obligations. At the same time, judges have sometimes held insurers responsible, including when an insurer was found on the hook in a BIPA class action.
Recent BIPA rulings have chipped away at insurance protections, leaving employers and vendors more directly exposed to litigation risk. The Nationwide ruling, however, shows that insurers are not always able to avoid defense duties at the early stages.
For companies deploying biometric systems, this ruling reinforces the importance of carefully reviewing insurance coverage. Businesses must assess whether policies explicitly include or exclude biometric/privacy liabilities, and whether insurers might later deny defense or indemnity based on exclusions.
Source: Law360
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By the ID Tech Editorial Team
