Does a cyber-claim endorsement cover TCPA and Consumer Fraud Act claims alleging unsolicited text messages for Botox treatments?

by Christopher Graham and Joseph Kelly

Have you received unsolicited text messages on your smart phone? Pretty annoying, right? Well someone received messages for the sale of Botox treatments and filed a Federal suit against the cosmetic surgery center that allegedly sent them. The recipient alleged violations of the Telephone Consumer Protection Act or “TCPA” and the Illinois Consumer Fraud Act. The surgery center filed bankruptcy. The text recipient was allowed to continue the suit, but only to the extent of the center’s insurance, namely, a cyber-claim endorsement under a professional liability policy. The insurer sought a declaration in state court that the endorsement provided no coverage. So what did the court decide? Is a TCPA or consumer fraud claim covered under a cyber-claim endorsement? Not under the wording of this one, according to the court in Doctor’s Direct Insurance, Inc. v. Bochenek, 2015 IL App (1st) 142919 (Aug. 3, 2015). And while the endorsement was for a professional liability insurance policy, you’ll see similar endorsements under D&O policies. So the case is worth a look even if you focus just on D&O insurance.

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