Do general liability policies provide coverage for limited disclosures of biometric data, such as fingerprints? The Illinois Supreme Court has concluded that they do.
In Verizon Communications v. Illinois National Insurance Company, a group of D&O insurers essentially asked, “When is a securities claim not a ‘Securities Claim’” (as defined in their policies)? And a Delaware Superior Court judge effectively answered, “Never.” Judge William Carpenter Jr. rejected the insurers’ crabbed reading of the term “securities claim” under their D&O policies, awarding Verizon some $48 million in defense costs the insurers had withheld.
The case arose from Verizon’s decision in 2006 to spin off its print directory subsidiary, Idearc. After Idearc filed for bankruptcy protection US Bank, as Idearc’s bankruptcy litigation trustee, sued Verizon and a Verizon executive who was Idearc’s sole director at the time of the spin-off, asserting claims of promoter liability and breach of fiduciary duty, payment of an unlawful dividend under Delaware corporation law, and fraudulent transfer under U.S. bankruptcy law and Texas statute.