Illinois Appeals Court Holds an Ankle Monitor Is “Potentially” Computer Hardware Triggering Duty to Defend Under Technology E&O Coverage

An Illinois appellate court, applying Illinois law, has held that a professional liability carrier had a duty to defend an ankle monitoring company against a lawsuit alleging bodily injury while wearing the ankle monitor because the policy could potentially cover bodily injury arising out of “professional services.” Admiral Ins. Co. v. Track Group, Inc., 2024 WL 1323620 (Ill. App. Ct. Mar. 27, 2024).

In the underlying action, an individual sued the insured ankle monitoring company, alleging that his leg was torn from his body after his ankle, on which he was wearing the insured’s monitoring device, became lodged between the gas and brake pedals of the vehicle he was driving. The ankle monitoring company reported the underlying lawsuit to both its general liability and professional liability insurers. The general liability insurer provided a defense, but the professional liability insurer denied coverage and filed a declaratory action.

The professional liability policy provided coverage for wrongful acts arising out of “professional services,” defined as “Technology Services Including Probation/Alternative Incarceration Monitoring Services for others for a fee.” “Technology Services” was defined to include “computer hardware or electronic component design, integration, maintenance, repair, or support” services performed by or on behalf of the insured. The policy excluded bodily injury and property damage; however, that exclusion did not apply to bodily injury arising out of the provision of “professional services.”

In reviewing cross-motions for summary judgment, the trial court held that the professional liability insurer did not have a duty to defend because the complaint did not allege any errors in monitoring the location of people wearing the devices or negligence in the design of the internal components of the monitoring device.

The appellate court reversed, holding that the professional liability insurer had a duty to defend. The court reasoned that, because the policy did not define “computer hardware” or “electronic component” as used in the definition of “Technology Services,” and because the monitor contained a central processing unit that processed data, “at the very least, the ankle monitor is potentially a computer” and “likely constitutes ‘hardware.’” Accordingly, “[b]ecause the ankle monitor is potentially computer hardware,” bodily injury arising out of use of the ankle monitor was “potentially covered” by the policy, thus triggering the insurer’s duty to defend.