TCPA Answers
Money

Does my general liability insurance cover a TCPA claim?

Usually not. Most commercial general liability policies written in the last two decades carry an exclusion that names the TCPA, and some courts treat the statutory damages as penalties that cannot be insured. Notify the broker anyway.

Probably not. Since the mid-2000s the standard commercial general liability form has carried an exclusion for claims arising from violations of the TCPA, the CAN-SPAM Act and similar statutes, often titled "Recording and Distribution of Material or Information in Violation of Law". If your policy has that wording, a TCPA demand is outside it on its face. Separately, courts have divided on whether the $500 and $1,500 figures are damages or penalties, and several have held them uninsurable as a matter of public policy.

What to do anyway

  1. Pull every policy: general liability, umbrella, cyber, errors and omissions, directors and officers. Search for "Telephone Consumer Protection Act" and "distribution of material".
  2. Send the demand letter to the broker in writing within days and ask for a written coverage position on each policy. Late notice is its own ground for denial.
  3. Plan on the basis that any resolution and any defence costs come from the business. If cover turns up, it is a bonus.

Why it matters to the decision

Many owners assume the alternative to paying a demand is a defence funded by someone else. Without cover it is not. The cost of contesting the matter is paid by the business win or lose, which changes the arithmetic on whether a lawyer will cost more than the demand. It is the same arithmetic behind should I settle a TCPA demand letter.

People also ask

Why notify the insurer if the policy excludes it?

Because the policy requires prompt notice of any claim and late notice can forfeit cover you did have, and because the exclusion wording varies. Ask for a written coverage position on every policy.

Is there a policy that does cover TCPA claims?

Some cyber, media liability and errors-and-omissions policies offer a TCPA endorsement, usually with a sub-limit and a retention. It has to be in place before the claim arrives.

Will the insurer at least pay for a defence?

Sometimes, under a reservation of rights, where the exclusion is arguable. Expect the carrier to contest indemnity even if it funds the defence.