The misuse of tracking pixels can result in the unauthorized collection of sensitive and personal data, leading to privacy breaches and potential harm to individuals. A series of class-action lawsuits have already been filed against Meta, hospitals, and healthcare networks alleging the collection of confidential patient health information protected under the Health Insurance Portability and Accountability Act (HIPAA). The good news is there are steps companies can take to help protect customer data and minimize their liability risk, including:

Ensure compliance with privacy policies and correct pixel usage
Communicate with C-suite executives and legal about pixel use strategy
Obtain adequate cyber insurance

Biometric Data Risk

There are also growing risks associated with the collection and use of biometric data. Biometrics, such as fingerprint and facial recognition, offer quick and convenient identification methods. However, the use of biometrics also raises legal risks. Companies using biometrics must obtain clear written consent from individuals and have transparent policies on data storage, protection, and disposal. Answering a few key questions can help organizations ensure compliant biometrics use. These questions include:

What happens to the data after it has been collected?
How are customers or employees notified that biometric data is being collected?
How is the company protected against potential privacy claims?

Insurance Implications

Because cyber insurance policies cover third-party privacy liability as well as regulatory proceedings, each insurer's policy must be evaluated to determine whether coverage is included for pixel- or biometrics-related claims. Coverage arising out of pixel or biometrics use is not affirmatively provided, so careful reading of insuring agreements, definitions, and exclusions is required. If coverage is in doubt, the agent or broker should contact the insurer to affirm their position of coverage. Some cyber insurers specifically exclude any wrongful collection of data by endorsement or by adding a specific pixel or code tracking exclusion to any risk where pixel ad tech is detected, nullifying any coverage.

Instant Insights /

How Pixels and Biometrics Lead to Privacy Claims

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