Fla. Court Says Insurer Must Cover Privacy Violation By Fax

NU Online News Service, Feb. 3, 9:24 a.m. EST

The Florida Supreme Court has ruled that insurers can be liable for unsolicited blast faxes that violate the Telephone Consumer Protection Act (TCPA) under a commercial general liability insurance policy.

The case, Michael Penzer etc. v. Transportation Insurance Co., stemmed from a class-action law suit brought by Michael Penzer against Nextel South Corp. for violating his and others' privacy under the TCPA when they received 24,000 unsolicited faxes from Nextel's authorized agent Southeast Wireless.

Southeast hired a blast fax company, Sunbelt, to produce and send the faxes with commercial messages.

According to the court papers, Southeast requested its insurer, Transportation Insurance, to defend the company under its insurance policy. The policy provided coverage from advertising injuries for, among other offenses, "oral or written publication of material that violates a person's right of privacy."

Transportation refused to indemnify Southeast, saying that the act did not violate the individuals' privacy.

Southeast settled the action, agreeing to allow the plaintiffs to seek the judgment from the insurance carrier.

In a unanimous decision late last week, the court found that the policy does provide coverage for infringements of the TCPA.

"Based upon our plain meaning analysis, we hold that an advertising injury provision in a commercial liability policy that provides coverage for an 'oral or written publication of material that violates a person's right of privacy' provides coverage for blast-faxing in violation of the TCPA," the court said.

William G. Passannante of the law firm Anderson Kill & Olick, who represented United Policyholders in its filing of an amicus brief, said in a statement, "We applaud the Florida Supreme Court's ringing affirmation of standard rules of insurance policy construction."

He said the rules "lead to the result that the advertising injury provision plainly covers liability for violations of privacy under the TCPA. Given that many state courts have made similar determinations, it's remarkable that insurance companies continue improperly to dispute their clear obligation under liability insurance policies to cover 'blast fax' violations under TCPA."