Between the Lines

A Discussion of Case Law and Statutory Law Affecting Commercial Lines of Insurance

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In the Age of Facebook, CGL Policy Privacy Coverage is Shrinking Fast

CGL Policies Got the Message
CC by sboneham

Until recently, purchasers of commercial general liability (CGL) insurance could count on protection for claims alleging privacy violations and breach of confidentiality.  But that was before tweeting and Facebook.  Confirming the trend towards far more variable coverage, ISO has filed a new endorsement that allows insurers to eliminate privacy coverage from its policies. The endorsement (number CG 24 13 04 13) is for use starting in April 2013.

In this environment, policyholders should take care to assess their potential exposure and the coverage their general liability carrier affords.  In some instances, they may need to purchase separate cyber liability or media liability coverage.

Coverage B of most CGL policies covers “personal and advertising injury.” The standard CGL policy defines “personal and advertising injury” to include “publication of material that violates a person’s right of privacy” (emphasis added).

But ISO’s new endorsement deletes “publication of material that violates a person’s right of privacy” from the list of offenses that it includes in its definition of “personal and advertising injury.”  This endorsement gives insurers the option to eliminate coverage that has become increasingly contentious as insurers grapple with the potential expansion of Coverage B to include liability for 21st Century conduct – spam, tweets, Facebook posts, computer hacking and the like.  As a result, insureds can no longer assume that their CGL policies include breach of privacy coverage.

Coverage B began as part of a broad form endorsement in the 1970’s, and made its way into the standard general liability form in the 1980’s.  Since then, the internet has become ubiquitous.  People routinely store reams of personal information not only on hard drives, but on smart phones and tablets (and perhaps, one day soon, on iWatches and Google glasses).  A typical commercial insured, not to mention your typical eight year-old, is capable of engaging in publication on a scale that was impossible thirty years ago.

“Personal and advertising injury” coverage is still part of most general liability policies.  But its scope now varies from carrier to carrier, and is increasingly subject to broad exclusions for electronic data, statutory liability and intellectual property offenses.  See my CGL Reporter article on this topic, CGL Coverage for Invasion of Privacy: Recent Cases and Trends.  With the introduction of the new ISO endorsement, some insurers may now choose to pare down Coverage B even more by excluding privacy violations entirely.

About Harvey: I specialize in Insurance Law and Litigation at Anderson & Kreiger. I recently won an insurance case in the First Circuit, which established useful new law concerning indemnification requirements for settlements. I blogged about that case for Between the Lines here.

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Harvey Nosowitz


Posted In: Personal and Advertising Injury

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