Coalition’s New Cyber Insurance Policy Reinforces Privacy Protection Amid Rising Web Data Lawsuits
Coalition has introduced Active Privacy Protection, an expansion of its Active Cyber Insurance Policy, designed to address growing privacy risks. The company’s new suite of coverage benefits, analytics tools, and insights targets the mounting threat of wrongful data collection claims that are increasingly affecting small and midsize businesses.
The launch coincides with the release of Coalition’s report, “The State of Web Privacy,” which analyzes nearly 200 data privacy claims and 5,000 business websites. The findings reveal a surge in lawsuits alleging violations of outdated privacy laws, often triggered by common online tracking tools.
“Coalition’s Active Insurance has already demonstrated that complete cyber protection comes not only from financially covering losses, but also from helping policyholders prevent them in the first place. Now, we’re applying that same innovative approach to privacy risks,” said Tiago Henriques, Coalition’s Chief Underwriting Officer.
Wrongful Collection: A Growing Legal and Insurance Risk
Coalition’s research shows that 77% of wrongful collection claims originated from website tracking activities. Most were linked to analytics tools and tracking pixels technologies embedded on millions of business websites.
Nearly 60% of claims targeted businesses with under $100 million in revenue, showing that privacy exposure is not limited to large enterprises.
“The risks of wrongful collection extend beyond cyber incidents,” said Daniel Woods, Coalition’s Principal Researcher. “They involve how data is gathered and shared. Many businesses face litigation simply for using everyday technologies like analytics scripts and chatbots.”
Old Laws, New Lawsuits
Coalition’s report finds that three-fourths of web privacy lawsuits cite the California Invasion of Privacy Act (CIPA)—a 1967 statute—while only a few cite modern laws like the GDPR or CCPA. The outdated legal framework has become a powerful tool for plaintiffs’ attorneys, who file claims at scale using templated demand letters.
Just four law firms accounted for 72% of all web privacy claims, relying on repetitive allegations that businesses unlawfully collected or shared user data through tracking technologies.
Tracking Technologies Under Fire
Among all privacy claims, 73% involved analytics tools, most notably the Meta Pixel, Google Analytics, and TikTok Pixel. These technologies, designed for marketing and user engagement, now represent significant litigation risk.
The Meta Pixel appeared in 43% of cases, making it the most frequently cited technology. Chatbots accounted for 5% of claims, often accused of recording conversations without proper consent under state wiretap laws.
Coalition’s web scans found Google Analytics present on 87% of websites using tracking technologies. Despite their ubiquity, many sites fail to adequately disclose these tools, leaving them vulnerable to legal action.
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Small Businesses Face Outsized Risk
Coalition’s data dispels the myth that only tech giants are vulnerable to privacy lawsuits. Retailers, healthcare providers, and IT firms now make up the bulk of defendants in these cases.
Smaller organizations often lack dedicated compliance teams or resources to monitor tracking scripts, third-party vendors, and privacy policy updates. This oversight gap creates easy targets for plaintiff law firms seeking settlements.
Coalition’s Active Privacy Protection: A Preventive Approach
Coalition’s Active Privacy Protection adds a new dimension to cyber insurance by helping businesses identify privacy risks before they turn into claims.
Using Coalition Control®, the company’s cyber risk management platform, policyholders can now view Privacy Risk insights within their Cyber Risk Assessments. These insights highlight high-risk tracking tools, missing consent banners, and gaps in privacy policies.
The program includes a Privacy Health Rating, actionable guidance for mitigation, and a unified dashboard that measures a business’s overall cyber and privacy posture.
Report Reveals Gaps in Privacy Controls
Coalition’s scans uncovered widespread weaknesses in website privacy controls:
- Only 19% of websites deploy consent banners.
- Fewer than 40% of low-traffic websites updated their privacy policies in the past year.
- Just 29% of privacy policies disclosed which tracking technologies were used.
These lapses create blind spots that can trigger wrongful collection claims under outdated laws.
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The Case for Cyber Insurance Coverage
Coalition urges businesses to treat privacy like cybersecurity—an ongoing process requiring real-time visibility and adaptive protection. Its Active Cyber Insurance Policy includes an Enhanced Privacy Liability Endorsement, providing explicit coverage for wrongful collection.
Coalition’s report concludes that traditional compliance checklists are no longer enough. Businesses must adopt continuous monitoring and proactive risk mitigation to avoid legal exposure.
“Privacy risk is now as dynamic as cyber risk,” the report notes. “Treating privacy as a one-time project leaves organizations perpetually behind.”
Everyday Analogy
Think about privacy protection like locking your house in a busy neighborhood. In the past, only big mansions needed good locks and alarm systems. Now, even small homes are vulnerable to break-ins. Coalition’s new coverage is like a smart lock that alerts you when someone jiggles the door before the thief gets inside.
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