4th Circuit Rules Insurer Must Defend Insured Against Class Action Data Breach

Written by: Tiffany Winks, Esq.

On Monday, April 11, 2016, the 4th Circuit ruled in Travelers Insurance v. Portal Healthcare Solutions that Travelers had a duty to defend Portal in a class action related to Portal posting patients’ medical records on the internet. A class action lawsuit was filed against Portal alleging patients’ medical records were accessible on the internet from November 2, 2012 to March 14, 2013.

Portal wanted to be defended in the class action by its insurer, Travelers. The Circuit Court agreed with the lower court and determined that Travelers was required by the insurance policies to defend Portal. The insurance policies required Travelers to cover damages for the “electronic publication of material” regarding a person’s private life. Travelers argued that Portal placing the medical records on the internet was not “publication” of the records until a member of the public actually read the records. The Court did not buy Travelers’ argument. Instead, the Circuit Court agreed with the lower court, that merely placing the information on the internet for anyone to read is publication. Travelers’ very limited interpretation of the word “publication” was not reasonable, and the Court refused to entertain it. As a result, the Court established the class action’s allegations are covered by the policies, and Travelers will have to defend Portal.

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