TCPA Coverage Depends On How "Advertising Injury" Is Defined In The Policy

The Telephone Consumer Protection Act protects consumers from unwanted phone calls, faxes and texts, and limits the use of certain automatic dialing and artificial voice systems. The TCPA has spawned a cottage industry of class-action lawsuits, with a dozen companies paying more than $200 million in settlements over the past three years. This article explains which policy language has been held to trigger coverage and which does not.

The claims fall under clauses covering “advertising injury.” The Insurance Service Office (ISO), the entity responsible for drafting form insurance policies, first offered coverage for advertising activities in 1973. The standard ISO policy form includes language defining what constitutes “advertising injury,” and it differs from non-ISO policies issued by some insurers.

In the ISO Form, advertising injury includes “oral or written publication of material that violates a person’s right of privacy.” In the non-ISO form, advertising injury includes “making known to any person or organization written or spoken material that violates an individual’s right of privacy.”

The majority of courts that have addressed the issue of whether AI coverage extends to TCPA claims have concluded that coverage is triggered under the ISO language but precluded under the non-ISO wording (although the authors also note that ISO-form coverage was circumscribed by endorsements in recent iterations). In light of the split of authority concerning coverage, a company served with a TCPA class action should review its insurance policies to determine which language is employed.