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Insurer must defend tanning salon in biometrics case

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biometrics

The Illinois Supreme Court on Thursday affirmed two lower court decisions and held that an insurer is obligated to defend a tanning salon that is being sued by a customer charging violation of the state’s biometric law.

The state’s high court unanimously agreed with earlier rulings by a trial court and an appeals court that West Bend, Wisconsin-based West Bend Mutual Insurance Co. was obligated to defend Schaumburg Illinois-based Krishna Schaumburg Tan Inc., which was charged with violating the Illinois Biometric Information Act.

The Illinois law, which is referred to as BIPA, requires businesses that store biometric information to inform the subject in writing that it is being collected or stored and the purpose and duration for which it is being collected, and to receive the subject’s written consent.

While several other states have comparable legislation, so far only the Illinois law permits a private right of action, which means individuals can file litigation under the law. Elsewhere, litigation must be filed by regulators or state attorneys general.

The case, West Bend Mutual Insurance Co. v. Krishna Schaumburg Tan, Inc. and Klaudia Sekura, originated with Ms. Sekura, whose membership in the tanning salon required her to provide it with her fingerprints. She allegedly was not notified about the company’s data retention policy.  

The Illinois Supreme Court said in its ruling that Ms. Sekura’s complaint fell within, or potentially within, West Bend’s two business owners liability policies because the underlying complaint alleged Ms. Sekura had suffered a nonbodily personal injury or advertising injury in the form of emotional upset, mental anguish and mental injury.

It said also that Krishna’s alleged sharing of the biometric information with its vendor, even though it was the sole outside recipient of the information, was a “publication” within the purview of West Bend’s policies and that Krishna’s alleged sharing of the fingerprint information it had obtained potentially violated Ms. Sekura’s right to privacy.

The court also said an exclusion in the coverage for violation of statutes does not apply to BIPA.

The case was remanded for further proceedings.

Ms. Sekura’s attorneys had no comment while other attorneys in the case did not respond to a request for comment.

Numerous cases have been filed under BIPA. In December, a federal district court ruled that a putative class-action lawsuit alleging violation of BIPA can proceed, rejecting the defendant’s argument that the law violated the state’s constitution.

 

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