Matthew R. Wildermuth, Esq. on the CGL Insurer's Duty to Defend and Indemnify Claims Arising Under the Fair Credit Reporting Act

Matthew R. Wildermuth, Esq. on the CGL Insurer's Duty to Defend and Indemnify Claims Arising Under the Fair Credit Reporting Act


In his analysis of the insurance coverage implications of claims asserted against credit card companies for alleged violations of the Fair Credit Reporting Act (“FCRA”), insurance coverage litigation expert Matthew R. Wildermuth, Esq. explores whether such claims trigger a commercial general liability (“CGL”) insurer’s duty to defend or indemnify its insured with respect to such claims and identifies potential pitfalls for insurers in responding to their insureds’ respective tenders of such claims.

Among other topics, the article addresses:


• Which coverage parts of the “standard” CGL policy warrant the most attention in the analysis of potential coverage for FCRA claims;
• Differences in the analytical framework for evaluating coverage for “invasion of the right of privacy” claims under the FCRA  and the related but distinct “junk fax” statute (the Telephone Consumer Protection Act);
• Recent opinions addressing coverage for FCRA claims under CGL policies; and
• Potential pitfalls for insurers who refuse to defend FCRA claims, including loss of control over settlement of the underlying claim and a bar against asserting otherwise potentially applicable coverage defenses.

There are also pitfalls for the policyholder too. As Mr. Wildermuth observes, “A determination whether the policyholder’s conduct rises to the level of actual or inferred intent to cause harm likely will involve specific factual inquiries regarding the basis for the policyholder’s actions, and it would be foolhardy for policyholders to presume that insurers will not exploit the opportunity to make such inquiries in the appropriate cases.” 
 
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