Northern District Injects Confusion As To Whether Insurers Can Rely On The Employment-Related Practices Exclusion To Preclude Coverage For BIPA Suit

On March 1, 2022, the Northern District of Illinois issued an opinion in Citizens Insur. Co of Am., & Hanover Insur. Co. v. Thermoflex Waukegan, LLC, 20-CV-05980, 2022 WL 602534 (N.D. Ill. Mar. 1, 2022) addressing whether insurance coverage existed for an employer with respect to its employee’s claims of violations of the Illinois Biometric Information Privacy Act (‘BIPA’), 40 ILCS 14/1 et seq.

In Thermoflex, an employee filed a class-action lawsuit against its employer in Illinois state court, alleging that his employer collected its employees’ handprint data in violation of BIPA.

The employer collected the handprint data for purposes of authentication and timekeeping.

The employer’s insurers denied coverage for the BIPA class action, relying on the Employment-Related Practices (‘ERP’), Recording and Distribution and Access or Disclosure Exclusions.

The insurers filed declaratory action in the Northern District of Illinois seeking confirmation that it had no duty to defend its insured for the BIPA class action.