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The Telephone Consumer Protection Act

The Telephone Consumer Protection Act of 1991 (TCPA) is a federal law that protects residential customers from unwanted telephone calls and faxes. It was created in response to consumer complaints directed at the Federal Communications Commission (FCC) regarding telephone marketing techniques like automatic dialers, prerecorded telemarketing messages, and unsolicited facsimile transmission advertising. After the TCPA was passed, the FCC adopted rules that placed certain requirements on telephone solicitation calls, such as what information the caller must provide and when calls may be made. In June 2003, the FCC expanded its rules and established the national Do-Not-Call list with the Federal Trade Commission (FTC).

The TCPA and the do-not-call provisions apply to calls made by any person or entity, unless an exemption applies. For example, they do not cover calls from political organizations or charities. Also, they do not apply to calls to consumers with whom a company has an existing business relationship, as long as the calls are made within a certain period of time and the consumer has not asked the company not to call again. Violators may be subject to fines of up to $16,000 per violation and each call may be considered a separate violation.

Common TCPA Violations May Trigger Coverage under a Commercial General Liability (CGL) Policy

Companies can violate the TCPA by sending blast faxes, prerecorded telemarketing messages or other types of communications that violate privacy under the Act. After a Supreme Court ruling in 2010, violation of the TCPA may trigger coverage under its commercial general liability insurance policy that provides coverage for advertising injuries.


Mass communications via email are addressed by the Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM), which regulates the use of unsolicited emails for marketing purposes, both business to consumer and business to business. The Act generally prohibits marketing emails unless they contain correct header information, a physical address for the mailer and an opt-out mechanism for recipients. Legal liability associated with CAN-SPAM violations is usually excluded in general liability policies.

Advertising Injury Coverage

Your company’s CGL policy may include a provision called “personal and advertising injury coverage,” which provides coverage for a variety of acts above and beyond typical physical damage claims. One such claim is advertising injury, which is an injury to a third-party brought about by a business advertising its goods and services. Your business may be provided advertising injury coverage through your CGL policy for claims such as libel and copyright infringement. Your CGL policy may include or exclude coverage for improper mass communications and other violations of the TCPA and the CAN-SPAM Act.

Keep in mind that some businesses, like Internet service providers and web site designers, are excluded from most advertising injury coverage. These companies will need to purchase a separate endorsement to be covered completely. Also, insurers may limit coverage of certain types of claims that carry the most risk. Some exclusions may relate to electronic forums or bulletin boards hosted by an insured and “spam” or mass electronic advertising. Premiums may also increase if additional coverage is added or claims increase. 

Reducing Risk and Understanding your Coverage

The best way to avoid unnecessary expenses related to advertising injury claims is to ensure that your company complies with all applicable laws, such as the TCPA. However, in the event that you are faced with a violation, understanding the coverage your CGL policy may provide can be a critical part of minimizing your liability. 

Posted 9:00 AM

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