Michael Penzer received an unsolicited fax. Instead of simply throwing it away, he sued Nextel South for invasion of privacy under the Telephone Consumer Protection Act (TCPA). That action then became a class action suit. Nextel filed complaints against its affiliates because they were more directly involved in the action.

One of the affiliates asked Transportation Insurance Company to defend it. Transportation declined to do so, stating there was no coverage under personal and advertising injury liability coverage.

The Florida Supreme Court agreed with the affiliate, found that there was coverage, and required Transportation to defend.

Click here for more details on this court case.

The major change in the 2007 version of the Insurance Services Office (ISO) Commercial General Liability (CGL) Coverage Form was the addition of two new exclusions. Both exclude TCPA actions. However, one is for bodily injury and property damage losses and the other is for personal and advertising injury losses.

Click here for an explanation of the major changes in the 2007 edition of the CGL.

The anti-concurrent causation exclusions are another example of unexpected covered losses leading to exclusions. They are now included in both personal and commercial coverage forms and policies and state that, when an excluded loss occurs, any loss associated with it is not covered. This wording became necessary when the courts determined that earthquake and flood losses were covered because the exclusions were ambiguous.

Click here for an analysis of the history of concurrent causation and anti-concurrent causation exclusions.

It is important for your clients to be aware of their exclusions. However, notifying them can also be a sales opportunity for you. Flood and earthquake losses can be covered along with many other excluded causes of loss. Offering your client the option to purchase such coverage is a win-win for both of you.

Click here for a letter you could use to notify your customer of a specific exclusion and to offer to assist them in obtaining the required coverage.

ISO recently updated the Commercial Auto and the Businessowners Programs. Please review PF&M for complete analyses of the latest updates along with comparisons to the prior editions.

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