Aon | Financial Services Group
Back to FSG Quick Insights | Subscribe to FSG Quick Insights >>
In April, the Illinois Senate passed SB 2979, a bill that aims to reform the statutory damages component of the Biometric Information Privacy Act (BIPA). If the bill passes in the Illinois House of Representatives in May, it may be enacted into law. As the law stands, entities that negligently violate BIPA are ordered to pay plaintiffs $1,000 or actual damages, whichever is greater. In intentional or reckless violations, plaintiffs’ recovery increases to $5,000 per violation or actual damages, whichever is greater. The amount of damages compounds for every violation, meaning each time a company collects or discloses a person's biometric information, they owe another $5,000. As evidenced in the case below, the financial impact on a company can be catastrophic.
In one case, a group of workers for a fast-food franchise alleged that the franchise violated Sections 15(b) and (d) of BIPA by requiring them to scan fingerprints to view paystubs and access computers and then transiting the data to a third-party vendor, all without informed consent. That court, in a 4-3 decision, held that claims under the respective sections accrued each time the fast-food franchise collected or disclosed the information without consent. Associated damages were assessed at over 17 billion dollars. Hence, the call for legislative reform.1
This bill, if enacted, could have a profound impact on entities that negligently or intentionally violate BIPA, potentially reducing the severity of associated claims and the financial burden on businesses. It would provide a single recovery to each individual whose information was unlawfully obtained or retained rather than multiple recoveries for each instance that an entity scans or transmits an individual’s biometric information.
Proceedings before the Illinois House are anticipated to occur prior to the end of its legislative session this May. If passed in the House, the bill will be reviewed by Governor Pritzker, who then has the option to sign the bill into law. The proposed changes to Illinois’s biometric law could prove favorable for companies and insureds by significantly reducing financial liabilities for violations. Aon will continue negotiating BIPA strategy with employment practices liability insurers as the bill progresses. If you have questions about or are interested in obtaining coverage, please contact your Aon broker.
1 Cothron v. White Castle Sys., Inc., 2023 IL 128004 (Feb. 17, 2023).
About Aon
Aon exists to shape decisions for the better — to protect and enrich the lives of people around the world. Through actionable analytic insight, globally integrated Risk Capital and Human Capital expertise, and locally relevant solutions, our colleagues provide clients in over 120 countries and sovereignties with the clarity and confidence to make better risk and people decisions that help protect and grow their businesses.
Follow Aon on LinkedIn, X, Facebook and Instagram. Stay up-to-date by visiting Aon’s newsroom and sign up for news alerts here.
©2024 Aon plc. All rights reserved.
Aon is not a law firm or accounting firm and does not provide legal, financial or tax advice. Any commentary provided is based solely on Aon’s experience as insurance practitioners. We recommend that you consult with your own legal, financial and/or insurance advisors on any commentary provided herein. All descriptions, summaries or highlights of coverage described herein are for general informational purposes only and do not amend, alter or modify the actual terms and conditions of any relevant policy. Coverage is governed only by the terms and conditions of such policy. Insurance coverage in any particular case will depend upon the type of policy in effect, the terms, conditions and exclusions in any such policy, and the facts of each unique situation. No representation is made that any specific insurance coverage would apply in the circumstances outlined herein. Please refer to the individual policy forms for specific coverage details.
The information contained in this document and the statements expressed are of a general nature and are not intended to address the circumstances of any particular individual or entity.
This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.
Insurance products and services offered by Aon Risk Insurance Services West, Inc., Aon Risk Services Central, Inc., Aon Risk Services Northeast, Inc., Aon Risk Services Southwest, Inc., and Aon Risk Services, Inc. of Florida and their licensed affiliates.