Member Article

The Fourth Circuit Court of Appeals has affirmed a lower court ruling finding that the placement of confidential patient medical records on the Internet qualifies as “publication” for purposes of an insurer’s duty to defend under a commercial general liability policy.

According to an underlying class action complaint, Portal Healthcare Solutions (“Portal”) allowed private medical records to remain on an unsecured server and exposed to anyone with an Internet connection for more than four months. At issue in coverage litigation between Portal and its general liability insurer, Travelers, was policy language requiring Travelers to pay sums Portal became legally obligated to pay as damages because of injury arising from the “electronic publication of material that … gives unreasonable publicity to a person’s private life” or “discloses information about a person’s private life.” Rejecting attempts by Travelers to require evidence that the policyholder intended to communicate information to third parties before a “publication” would be found, District Court Judge Gerald Bruce Lee ruled that, if proven, plaintiffs’ allegations qualified as “publication,” which the dictionary defines broadly to include “plac[ing] before the public (as through a mass medium).”

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