In this piece, Zywave takes a look at emerging risks surrounding incorrect use of tracking data. In a digital economy it’s vital to clarify the use of data and informed consent.
Claims from the wrongful collection of data, and specifically pixel-related matters, represent an emerging risk exposure trend in 2023—one which we will likely see grow measurably in the months and years ahead. With a tracking pixel, digital advertisers can acquire data to build and optimize audiences for ad campaigns, but this approach can be a breach of privacy when data is collected without users’ knowledge.
A variety of companies, such as Meta, Google, TikTok, as well as several hospital systems, have pixel-tracking tools which load when someone visits a website. Because they’re tiny or camouflaged, users seldom detect them. Zywave is already monitoring over 100 unique loss situations stemming from pending litigation where pixel data misuse is alleged.
A main concern with claims from any wrongful collection of data is that they can take years to resolve due to liability issues over the limited knowledge of the severity of losses.
The emerging risk related to pixel technology should make insurers think carefully about liabilities that could stem from possible violations of HIPAA and/or Video Privacy Protection Act (VPPA) of 2008, which provide the private right of action with statutory damages.
As pixel-related claims impact insurers, questions will be asked about their insurability. The issue follows several U.S. states passing biometric laws to prevent companies from collecting data such as facial recognition and fingerprints without permission. Zywave is currently monitoring 928 unique loss situations where a breach of the 2008 Biometric Information Privacy Act (BIPA) is alleged.
Given increased regulation protecting data privacy, this area of coverage will likely have a significant impact on insurer loss ratios in the future.
Be the first to comment