Cyber Insurers Confront Rising CIPA Litigation Over Web Tracking Tools

Cyber claims adjusters are now grappling with a sharp rise in wrongful data collection lawsuits, largely driven by aggressive enforcement of the California Invasion of Privacy Act (CIPA). Although a state law, CIPA is being used as a nationwide litigation tool targeting businesses that use ordinary tracking technologies—such as Meta Pixel or TikTok Pixel—on their websites. These lawsuits often allege statutory violations, bypassing the need to prove actual harm and instead focusing on technical infractions.

This shift from breach-based litigation to wrongful collection has caught many insurers off guard. Claims now stem from user interactions with digital platforms rather than data theft, complicating both the identification of coverage and the defense process. Insurers face growing pressure to decide whether to exclude, stay silent on, or affirmatively cover these types of claims—each path carrying its own risks for disputes and payouts.

For claims adjusters, this trend creates new challenges in evaluating policy language, especially around exclusions, consent mechanisms, and intent behind data collection. It also emphasizes the need for a deeper understanding of how web tracking tools are used by insureds and how courts interpret ‘interstate’ digital activity. With some law firms pursuing mass settlement strategies, the volume of these cases may seem low-severity on the surface, but emerging high-exposure lawsuits suggest significant financial and reputational risk ahead.