D&O Policies: A Possibility For TCPA Coverage?

Business is booming for plaintiffs' attorneys wielding the Telephone Consumer Protection Act (TCPA). The TCPA restricts unsolicited telemarketing by fax, voice calls and text messages. Violations can trigger liability of at least $500 for each fax, text or call. The prospect of lucrative recoveries has proven to be attractive, with the volume of TCPA class actions steadily rising for almost a decade. Settlements often run in the millions or multi-millions of dollars. In fact, plaintiffs' attorneys have broken records for TCPA settlements the past two years in a row (securing settlements of $32 million from Bank of America in 2013, and a staggering $75.5 million from Capital One and three debt collectors in 2014).

TCPA class action lawsuits pose a substantial risk to just about any business with a marketing budget. Many businesses have sought insurance coverage for TCPA claims under their commercial general liability (CGL) policies, but have met with only mixed success. While some courts have found coverage for TCPA claims under CGL policies, CGL insurers have increasingly added explicit TCPA exclusions to their policies, cutting off that source of coverage.

Some TCPA defendants have turned to their Directors and Officers (D&O) policies in an effort...