Zip code information requests leads to litigation
Insurers are facing a growing number of lawsuits brought by clients who want defense coverage for allegations of violations of consumer privacy relating to zip code information. Over one hundred cases have been filed in California against retailers alleging that retailers who request zip code information are engaging in practices that violate privacy statutes. Cases have also been filed in Massachusetts. In turn, the retailers are seeking coverage for legal bills defending these cases under their General Liability Insurance policies.
Defendants in the lawsuits include many of the top retailing names in the country. Michaels Stores, Best Buy, Tiffany & Co., Home Depot, Crate & Barrel, Coach, Nordstrom and J.C. Penney are just some of the big monikers on the line in these cases.
The Wall Street Journal estimated that “(I)f courts rule against insurers, as they have done with some asbestos and mold claims, it can result in billions of dollars in claims and a rewording of policy language to eliminate other vulnerability in new policies”. Hartford Insurance and other leading insurers are reported to be fighting the cases strongly.
A decision against an insurer in one of these cases could hasten a change in the market for General Liability Insurance in this segment.
About the Author
Phil Edmundson is the Chairman and CEO of William Gallagher Associates (WGA), insurance brokers and consultants for businesses with over 30 years in the insurance industry. He manages strategy, talent acquisition and development, and management / acquisitions at WGA.
617.646.0229 PEdmundson@wgains.com Connect with Phil on LinkedIn