Hunton Insurance Recovery Blog

What Happened:

The Tenth Circuit held that, under Colorado law, an insurer did not need to cover a satellite television provider under two commercial umbrella liability policies in connection with a lawsuit alleging the company’s telemarketing practices violated the Telephone Consumer Protection Act (TCPA), 47 U.S.C. §227 et seq.

The Bottom Line:

This decision is a reminder that policy wording, as well as state law governing interpretation of insurance policies, varies greatly with respect to potential insurance coverage for alleged violations of the TCPA and similar statutes. While some states have characterized TCPA remedies as uninsurable penalties, it is not consistent across the country and policyholders therefore must review their policies carefully to determine the existence and scope of any TCPA coverage.

In addition, because the Tenth Circuit’s decision means that—in Colorado at least—claims for statutory damages under the TCPA may not be insurable, companies engaging in telephonic communications with consumers must ensure that they have robust TCPA compliant policies and procedures in place to further limit TCPA exposure.

The Seventh Circuit has reversed a lower court’s decision to dismiss a lawsuit against Federal Insurance Company and a health insurance technology company for unauthorized robocalls soliciting the sale of health insurance. The court emphasized that the complaint, which alleged the two companies were vicariously liable for the calls, pled sufficient detail to move forward.

On August 29, 2017, my colleagues Lawrence J. Bracken, Michael Levine, and Geoffrey Fehling published an article in Law360 discussing the Ninth Circuit's recent decision rejecting coverage for the Los Angeles Lakers' director's and officer's (D&O) insurance claim arising from a fan's class action lawsuit under the Telephone Consumer Protection Act (TCPA), based on a broadly-worded invasion of privacy exclusion in the Lakers' D&O insurance policy. A split Ninth Circuit panel held that "[b]ecause a TCPA claim is inherently an invasion of privacy claim, [the insurer] correctly concluded that [the claimant]'s TCPA claims fell under the Policy's broad exclusionary clause." The full article is available here.