Appeals Court: General Liability Covers Data Breach Class Action

When data is made publicly available on the internet, it can be considered “published” under the terms of a general liability insurance policy, the Fourth Circuit District Court has ruled. In the case, Travelers Inde,. Co. v Portal Healthcare Solutions, LLC, the ruling means that Travelers Insurance will have to defend Portal, a medical records company, against a class action suit stemming from cyber publication of personal health information. Portal was sued in April 2013 by two New York plaintiffs who found their own confidential medical records online using a simple Google search. The records were hosted on a website maintained by Portal. The lawsuit claims negligence, breach of warranty, and breach of contract. Travelers rejected coverage and sued Portal, seeking a declaration that it was under no obligation to defend the company since it failed to prove the information was “published.” But the district court found that, under the dictionary meaning of publish – “to place before the public (as through a mass medium)” – Portal’s claim checks out.