AIG Unit Gets Mixed Illinois Court Ruling on BIPA Coverage

An American International Group Inc. insurance unit must pay defense costs for an Illinois discount grocer in a suit alleging biometric privacy law violations, but only once coverage under other insurance is exhausted, a federal court ruled.

Commerce & Industry Insurance Co. can deny coverage under one of its umbrella policies, which contains an access and disclosure exclusion that a federal appeals court previously ruled bars coverage, Judge Charles P. Kocoras of the US District Court for the Northern District of Illinois said in a Tuesday order.

However, the insurer has the duty to defend Tri City Foods Inc. under ...