Fueled by statutory damages that can amount to millions of dollars, companies are increasingly finding themselves the subject of class-action lawsuits for alleged invasions of privacy, including violations of federal and state statutes, as well as claims of negligence and of common law invasion of privacy. Faced with the potential of incurring substantial defense costs in addition to any ultimate liability, policyholders should first look towards their errors and omissions (E&O) and/or technology/media liability insurance policies to provide coverage for liability including any defense costs arising out of an invasion of privacy claim.
These policies often contain specific coverage grants for alleged violations of privacy laws. A policyholder’s directors and officers (D&O) policies or employment practices liability (if the claim is made by an employee) policies may also provide coverage. In the absence of specific coverage, policyholders can also look to the advertising coverage grant of their commercial general liability (CGL) policies to provide for payment of defense costs and/or potential liability arising out of a settlement or judgment of a claim.
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