The United States District Court for the Northern District of Illinois, applying Illinois law, has held that an Employment Practices Liability (EPL) policy’s “Violation of Laws Applicable to Employers” exclusion bars coverage for suits alleging violations of Illinois’s Biometric Information Privacy Act (BIPA). Church Mutual Ins. Co. v. Prairie Village Supportive Living, LLC, No. 21-C-3752, 2022 WL 3290686 (N.D. Ill. Aug. 11, 2022).

The insured, an assisted living facility, purchased liability insurance coverage including EPL coverage. The insured’s former employee filed a lawsuit alleging that the facility had unlawfully collected, used, and disseminated biometric identifiers of its employees in violation of BIPA. The facility sought insurance coverage under the policy.

The insurer denied coverage, citing to the EPL coverage part’s “Violation of Laws Applicable to Employers” exclusion, which precluded coverage for claims “based on, attributable to, or arising out of” ERISA violations or “any violation of any insured’s responsibilities or duties required by any other federal, state, or local statutes, rules, or regulations, and any rules or regulations promulgated therefor or amendments thereto.” Notably, the exclusion expressly did not apply to claims arising out of various statutes prohibiting discrimination (such as Title VII of the Civil Rights Act, the Americans with Disabilities Act, and the Equal Pay Act), and “any rules or regulations promulgated under any of [the...

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