Seventh Circuit Ruling On Insurance Coverage For Biometric Privacy Class Actions Strays From Trend Protecting Policyholders

In light of the continuing barrage of lawsuits brought under the Illinois Biometric Information Privacy Act (BIPA), companies should be able to rely on their general liability (GL) insurers to defend and indemnify them from potential BIPA liability. For years, the Illinois Supreme Court and the U.S. Court of Appeals for the Seventh Circuit were in lockstep in protecting corporate policyholders from overreaching insurers looking to avoid BIPA liability.

Recently, however, the Seventh Circuit strayed from that trend in Thermoflex Waukegan, LLC v. Mitsui Sumitomo Insurance USA, Inc., No. 23-1521, 2024 WL 2237977 (7th Cir. May 17, 2024), ruling on the applicability of several GL policy exclusions to BIPA lawsuits with mixed results for policyholders. Ultimately, the court held that the insurer had to defend its policyholder against a BIPA action under its umbrella policy, adopting a policyholder-favorable interpretation of an exclusion that has been subject to