A Northern District of Illinois Court recently ruled on a motion for judgment on the pleadings in a Biometric Information Privacy Act ("BIPA") insurance coverage dispute in Society Insurance v. Cermak Produce No. 11, Inc., No. 21 CV 1510, 2023 WL 4817667 (N.D. Ill. 2023).
In Cermak, the insurer argued that the Recording and Distribution Exclusion, the Access of Disclosure Exclusion, and the Employment-Related Practices Exclusion barred coverage. Id. at *1-2. The Court rejected each of the arguments, relying in part in the Seventh Circuit’s opinion in Citizens Ins. Co. of Am. v. Wynndalco Enters., LLC, 70 F.4th 987 (7th Cir. 2023) Id. The Court further utilized canons of construction under the doctrines of ejusdem generis and noscitur a sociis. Id. at *4. The Court rejected a board interpretation of the exclusions, finding that the exclusions would eliminate statutory claims for “personal and advertising injury” that the policies purported to cover. Id. at *8.
Cermak is a reminder that the Illinois Supreme Court has yet to weigh in on certain exclusions and how they apply to BIPA cases. Courts construing the Recording and Distribution Exclusion, the Access of Disclosure Exclusion, and the Employment-Related Practices Exclusion can and have utilized canons of constructions to reject insurers’ attempts to limit coverage. While some Courts have held no coverage pursuant to policy exceptions in BIPA cases (see Am. Fam. Mut. Ins. Co. v. Caremel, Inc., No. 20 637, 2022 WL 79868, at 4 (N.D. Ill. 2022) (finding the Employment-Related Practices Exclusion barred coverage); Am. Fam. Mut. Ins. Co. v. S.I. v. Carnajgio Enters., Inc., No. 20 C 3665, 2022 WL 952533, at *10 (N.D. Ill. 2022) (finding the Access of Disclosure Exclusion barred coverage)), following Wynndalco Enters., Courts appear to now focus on canons of construction under the doctrines of ejusdem generis and noscitur a sociis to support coverage. Thus, insurers must stay vigilant and should stay up to date on developments in cases determining coverage for BIPA claims to ensure to avoid any potential bad faith claim.
For more guidance in understanding this legal development, please contact Jonathan L. Federman or members of the Insurance practice group listed below.