A unit in the Hannover Insurance Group must defend an IT company in two class-action lawsuits filed under the Illinois Biometric Information Privacy Act, a federal district court ruled Wednesday, concluding that an exemption from the policy is ambiguous.
Wynndalco Enterprises LLC, based in Addison, Illinois, was sued in two separate class actions for selling information in violation of BIPA, according to the judgment of the U.S. District Court in Chicago in Citizens Insurance Co. of America v. Wynndalco Enterprises LLC.
The case relates to New York-based Clearview AI Inc.’s secret collection of more than three billion face scans, according to court papers.
In February, the Chicago District Court refused to dismiss a suspected class action lawsuit against Clearview. Wynndalco licensed and sold access to Clearview’s database and app to customers in Illinois, the ruling said.
BIPA requires that companies that store biometric information in writing inform the subject that data is being collected or stored and for what purpose and duration it is collected, and that they obtain the subject’s written consent.
After Wynndalco and two of its officials informed the Hanover entity Citizens Insurance of the lawsuit and requested that it finance the defense of the lawsuit under its cover, the insurer brought an action and requested a declaratory judgment that Wynndalco’s policy did not cover the two underlying lawsuits.
Citizens argued that it is not obligated to cover the company due to the policy’s statutory exemption for laws dealing with the distribution of materials or information.
The court ruled against the insurer, stating that neither the clear text of the policy nor the “construction cannons” point to the “clear meaning” of the exclusion, which is “unambiguously ambiguous”, the ruling said.
‘ to cite a previous case and keep the policy provides coverage for the underlying lawsuits, and that citizens have an obligation to defend Wynndalco and its officials.
Lawyers in the case did not respond to a request for comment.