Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Insurer must defend case over biometrics privacy

Reprints
Insurer must defend case over biometrics privacy

A Hanover Insurance Group unit must defend an information technology company in two class actions filed under the Illinois Biometric Information Privacy Act, a federal district court ruled Wednesday, concluding that a policy exclusion is ambiguous.

Wynndalco Enterprises LLC, based in Addison, Illinois, was sued in two separate class action lawsuits for allegedly selling information in violation of BIPA, according to the ruling by the U.S. District Court in Chicago in Citizens Insurance Co. of America v. Wynndalco Enterprises LLC.

The case relates to the secret collection by New York-based Clearview AI Inc. of more than three billion facial scans, court papers say.

In February, the district court in Chicago refused to dismiss a putative class action lawsuit filed against Clearview. Wynndalco licensed and sold access to Clearview’s database and app to Illinois customers, the ruling said.

BIPA requires businesses that store biometric information to inform the subject in writing that data is being collected or stored and the purpose and duration for which it is being collected, and also that they obtain the subject’s written consent.

After Wynndalco and two of its officers notified Hanover unit Citizens Insurance of the lawsuit and requested that it fund the suit’s defense under its coverage, the insurer filed suit seeking a declaratory judgment that Wynndalco’s policy did not cover the two underlying lawsuits.

Citizens argued it is not obligated to cover the company because of the policy’s statutory exclusion for laws that address the distribution of material or information.

The court ruled against the insurer, stating that neither the policy’s plain text nor “canons of construction” point to the exclusion’s “clear meaning,” which is “intractably ambiguous,” the ruling said.

“Thus, Citizens has not met its burden to ‘affirmatively establish’ that the exclusion applies, much less that its application is ‘clear and free from doubt,’ as it must in order to rebut Wynndalco’s initial showing of coverage,” the ruling said, in citing an earlier case and holding the policy provides coverage for the underlying lawsuits, and that Citizens has a duty to defend Wynndalco and its officers.

Attorneys in the case did not respond to requests for comment.