A panel of federal appellate judges expressed skepticism concerning insurance coverage provisions for privacy violations, particularly in the context of Illinois’ distinctive privacy laws. This admonishment was apparent during discussions involving litigation faced by Thermoflex Waukegan LLC, due to alleged violations of an Illinois privacy statute.
The Illinois Biometric Information Protection Act (BIPA) prohibits the collection of workers’ biometric information, such as iris scans or fingerprints, without requisite consent. An ongoing class-action lawsuit maintains that Thermoflex Waukegan LLC contravened this Act, leading to potential losses amounting to millions of dollars.
Thermoflex sought coverage from its insurer, Mitsui Sumitomo Insurance USA Inc., given the magnitude of the potential damages. However, Mitsui Sumitomo declined to indemnify Thermoflex based on their assertion that specific policy exemptions precluded such coverage.
These deliberations highlighted the critical focus judges placed on the wording of insurance policy exclusions. This case exemplifies the continual legal debate surrounding insurance coverage for privacy violations, the resulting implications of which may carry significant repercussions for both insurance providers and their insured clientele.
Read more from the original article here.