Insurance Coverage & Data Privacy: Fourth Circuit finds duty to defend; posting of patient medical information is a “publication” under a CGL policy.

The Fourth Circuit Court of Appeals recently held that posting of confidential patient information constitutes “publication” under a standard CGL policy.  Travelers Indem. Co. of Am. v. Portal Healthcare Sols., LLC affirms a lower court’s ruling that posting confidential medical records online qualifies as a “publication” under a commercial general liability (CGL) policy, triggering the insurer’s duty to defend. No. 14-1944 (4th Cir. Apr. 11, 2016) (unpublished, per curium).

The coverage dispute arose from a class action lawsuit by former patients who alleged Portal Healthcare Solutions breached their privacy by allowing private medical records to be accessed for months by anyone on the internet.  Portal tendered its defense to Travelers under its CGL policy.  Travelers denied a duty to defend or indemnity.

The Travelers policy covered damages for injury arising from “electronic publication of material that … gives unreasonable publicity to a person’s private life” or “discloses information about a person’s private life.”  Applying the policy language to the underlying complaint, the lower court held that exposing material to the online searching of a patient’s name does constitute a “publication” of electronic material, satisfying the policies’ prerequisite to coverage.  Further, the public availability of a patient’s confidential medical records gave “unreasonable publicity” to that patient’s private life and “disclosed” information about that patient’s private life, satisfying the policies second prerequisite to coverage.

The Fourth Circuit agreed.  In its unpublished opinion, the panel ratified the district court’s “sound legal analysis,” holding the class-action complaint “at least potentially or arguably” alleges a “publication” of private medical information by Portal that constitutes conduct covered under the Policies.  The court rejected what it viewed as efforts to parse alternative dictionary definitions to absolve Travelers of the duty to defend.

This holding adds definition to the contours of the scope of coverage for breach-of-privacy claims under CGL policies.

If you have any questions concerning this case or any other insurance coverage matter, feel free to contact Bob Kuderer, Matt Johnson, or Tom Brock.