Court ruling against Hanover suggests insurers may have to cover privacy violations

A recent appeals court decision calls into question insurers’ ability to get out of covering clients who are sued for gathering consumers’ biometric data without their consent.

The Seventh Circuit appeals court recently upheld a ruling that Citizens Insurance Co. of America, which is owned by Hanover Insurance Group, must defend Wynndalco Enterprises, an IT company client, against two proposed class actions alleging Illinois Biometric Information Privacy Act violations. In the two class actions, plaintiffs allege the Chicago Police Department gained access to Clearview AI’s facial-recognition app database through the vendor. 

BIPA is a state-wide regulation in Illinois that requires companies to receive written consent from people before collecting, storing or using their biometric data, as well as written policies related to destroying the data.

Jason Rosenthal, an Illinois-based attorney at the law firm Much Shelist, spoke with Digital Insurance about the significance of this ruling and how it could impact insurance companies.