Ohio Security Insurance Escapes BIPA Liability in Court Ruling

Ohio Security Insurance Co. has successfully avoided the obligation to defend its client, Wexford Home Corp., in a class action lawsuit filed under the Illinois Biometric Information Privacy Act (BIPA). The significant decision was made by the Illinois Appellate Court, which reversed an earlier circuit court ruling that had initially favored Wexford Home Corp.

The case revolved around allegations that Wexford Home Corp. had violated BIPA by improperly handling biometric data, such as fingerprints or other biometric identifiers. The crux of the legal dispute centered on the interpretation of the insurance policy terms. Ohio Security Insurance Co. argued that its policy did not cover the claims made under BIPA. The appellate court agreed with this stance, finding that the insurance policy’s terms did not obligate Ohio Security to provide a defense because the claims did not fall within the policy’s coverage parameters.

The decision highlights the importance of carefully reviewing insurance policies to ensure they explicitly cover potential liabilities arising from privacy laws like BIPA.

The court’s reasoning emphasized that the circuit court had erred in its initial judgment by granting a defense obligation to Ohio Security Insurance Co. The appellate court pointed out that the insurance policy in question did not explicitly cover liabilities arising from BIPA violations, which are often considered outside the scope of standard insurance coverage unless specifically included. This interpretation aligns with a broader trend in Illinois courts, where judges have frequently found no duty to defend or indemnify under similar circumstances involving BIPA claims.

This decision serves as a reminder for businesses to carefully review their insurance policies and ensure they have adequate coverage for emerging risks related to biometric data collection and use. It also highlights the need for strict compliance with biometric privacy laws to mitigate legal and financial exposures. This is especially pertinent given the recent amendments to BIPA, which have altered the landscape of biometric privacy litigation by limiting claimable damages.

Source: Bloomberg Law

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December 3, 2024 – by the ID Tech Editorial Team