What is the story about?
What's Happening?
A rise in privacy lawsuits targeting web tracking technologies is prompting cyber insurers to reconsider their coverage policies. Companies using tools developed by Meta Platforms Inc., Google, and others to monitor website user activity are facing class actions under state wiretap statutes and privacy laws like the California Invasion of Privacy Act. Insurers, including units of Berkshire Hathaway Inc. and Hartford Insurance Group Inc., have begun adding exclusions to shield against litigation costs. While cyber insurance has traditionally covered such claims, insurers are now tightening policy language, requiring specific triggers for coverage. This shift is a response to increased exposure from web tracking litigation.
Why It's Important?
The changes in cyber insurance policies could significantly impact businesses across various sectors, including healthcare, sports, and entertainment, which rely on web tracking technologies. As insurers add exclusions, companies may face higher litigation costs without coverage, potentially affecting their financial stability. The competitive nature of the cyber insurance market may lead to favorable terms, but the evolving policy language could create uncertainty for businesses seeking coverage. This development underscores the need for companies to prioritize compliance to mitigate risks associated with web tracking technologies.
What's Next?
Businesses affected by web tracking lawsuits are likely to focus on compliance to reduce future claims. Health-care companies, for instance, have already started minimizing the use of tracking software on patient portals. Insurers may continue to refine policy language, potentially leading to more coverage disputes. Companies should review their insurance policies to ensure they are adequately covered and consider notifying insurers under all applicable policies to avoid losing coverage.
Beyond the Headlines
The insurance challenges echo those faced by companies dealing with Illinois' Biometric Information Privacy Act, which led to disputes over general liability policies. As insurers exclude web tracking claims, the litigation landscape may shift, affecting the viability of such lawsuits. This could lead to a focus on compliance and legislative changes, similar to the impact seen with biometric data litigation.
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