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Hartford must defend company in biometrics case under EPLI policy


An Illinois federal district court ruled Tuesday that a Hartford Financial Services Group Inc. unit must defend a janitorial services company in biometrics litigation under its employment practices liability policy.

The U.S. District Court in Peoria, Illinois, cited language in Vonachen Services Inc.’s handbook in holding Hartford unit Twin City Fire Insurance Co. must defend the Peoria-based janitorial services company in two putative class action lawsuits that charge it with violating 2008’s Illinois Biometric Information Privacy Act, according to the ruling in Twin City Fire Insurance Co. v. Vonachen Services Inc., et. al.

While other courts have ruled on whether policyholders can seek indemnification under their commercial general liability policies, this is the first to rule on whether EPLI policies are applicable, according to the policyholder attorney in the case, who says the ruling is likely to be influential.

The court said in its 48-page ruling, however, that it is premature to decide Twin City must also indemnify Vonachen because there have been no underlying decisions in those cases.

BIPA requires employees’ and customers’ prior consent before collecting biometric information, including fingerprints. 

While there are comparable laws in other states, to date Illinois’ is apparently the only state whose legislation provides for a private right of action, which permits plaintiffs to sue a company for its violation.  The law provides for $1,000 for each negligence violation, and up to $5,000 for each intentional or reckless violation.

The ruling said, “it is a close call” as to whether the underlying actions are within the EPLI coverage, “But any doubts as to coverage must be construed in favor of the insured.”

It says because the handbook requires Vonachen to use its designated timekeeping system “and Vonachen has obligated itself to comply with all laws associated with that system, including BIPA, Twin City’s duty to defend has been triggered based on the alleged BIPA violation in the underlying complaint.”

The court agreed with Twin Cities that the directors and officers policy did not provide coverage.

Plaintiff attorney John S. Vishneski III, a partner with Reed Smith III in Chicago, said the ruling is significant. He said most or all of the reported decisions on the issue “are in the CGL context, including last year’s Illinois Supreme Court ruling in West Bend Insurance Co. v. Krishna Schaumburg Tan Inc. and Klaudia Sekura.

He said the company’s handbook provisions cited in the ruling “are a very common feature,” and he anticipates the decision will lead to more litigation filed by plaintiff class-action attorneys.

A Twin City attorney had no comment.









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