Companies that have settled lawsuits for millions of dollars under the Illinois Biometric Privacy Act are now having to battle their insurance providers to get their costs reimbursed.

Facebook agreed to pay $650 million in 2021 to settle a class action lawsuit alleging that the app violated the state’s biometric privacy law by using facial recognition technology until November 2021. In similar cases, Google agreed to pay $100 million, TikTok $92 million and Snapchat $35 million...

POLICY EXCLUSIONS

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A lot of privacy law violations fall under the “advertising injury” part of CGL policies because it has a subpart that relates to privacy violations, said Cort Malone, a shareholder in the New York office of Anderson Kill. Malone represents policyholders.

But insurance companies have cited a number of exclusions, including violation of statutes, with mixed success. More often than not, insurers haven’t succeeded, Malone said.

The fact that multiple courts have reached different conclusions when considering the same policy exclusions shows the insurance terms are ambiguous and should be read in favor of coverage, legal experts say.

The basic rule of insurance policy construction is that if an insurer is trying to rely on policy language to get out of coverage, any language ambiguity should be resolved in favor of the insured, particularly when the ambiguity is within an exclusion, Malone said.

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