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The Hannover unit must defend the IT company in the BIPA case



A federal appeals court on Thursday affirmed that a Hanover Insurance Group unit must defend an IT company in two putative class-action lawsuits filed under the Illinois Biometric Information Privacy Act.

The 7th US Circuit Court of Appeals in Chicago affirmed an April 2022 ruling by the US District Court in Chicago in Citizens Insurance Co. of America v. Wynndalco Enterprises LLC, which held that a blanket exclusion in the policy issued by Hanover entity Citizens was ambiguous and therefore the insurer had a duty to defend the policyholder.

Addison, Illinois-based Wynndalco was sued for selling information in violation of BIPA. The law requires companies that store biometric information to inform the subject in writing that the data is collected or stored and for what purpose and duration it is collected. They must also obtain the subject̵

7;s written consent.

The case relates to New York-based Clearview AI Inc.’s secret collection of more than 3 billion facial scans, according to court papers.

In ruling against Hanover and affirming the lower court’s decision, a three-judge panel of the Court of Appeals cited a policy provision that bars coverage for damages arising out of certain statutory provisions.

“A plain reading of that provision would swallow a substantial portion of the coverage that the policy otherwise expressly purports to provide in defense of a covered “personal or advertising injury,” and arguably all coverage for certain categories of fault . . . which is entirely statutory in nature,” the panel said.

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


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