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Insurance Coverage For Blast Faxes

By Timothy W. Burns, Scott T. Schutte and Marek H. Badyna

The past few months have seen an explosion in the number of lawsuits filed under the Telephone Consumer Protection Act, 47 U.S.C. '227 (2003) (TCPA), a federal statute that prohibits transmittal of unsolicited advertisements by fax without first obtaining the prior express invitation or permission of the recipient. These lawsuits ' particularly when filed as class actions ' expose defendants to substantial defense costs and the potential for large liabilities.

These TCPA lawsuits cases are, in turn, spawning disputes between TCPA defendants and commercial general liability (CGL) insurers as to whether policyholders are entitled to a defense and/or indemnity for TCPA claims under standard-form CGL policy. This article briefly explores these insurance coverage issues. It concludes that, given recent case law, policyholders have a strong chance of recovering their defense costs and any settlements or judgments in TCPA lawsuits.

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