Insurance Carve-Out for Illinois Privacy Violations Ruled Valid

Illinois insurance companies may rely on exclusions in their policies to refuse coverage to companies accused of violating the state privacy law, a state appellate court ruled Tuesday.

The unanimous decision refutes the conclusions of a similar federal case that said an insurance company facing the same situation was on the hook for covering the plaintiff company’s legal costs.

The insurers in the state case, National Fire Insurance Company of Hartford and Continental Insurance Company, claimed their policies’ exclusions carved out claims under the Illinois Biometric Information Privacy Act, or BIPA.

A lower circuit court found Visual Pak Company ...