Exclusion J. Damage to Property:  “Property Damage” to (4) Personal Property in the care, custody or control of the insured.

For example, your client drops off their laptop to you for repairs.  You take the laptop with you as you head to another client’s location.  While you are there, someone breaks into your car and steals numerous items, including your client’s laptop.  Your General Liability policy would not respond; however, if you purchase a Property policy or are able to add Property coverage to your existing General Liability policy, there is a coverage that can be included called “Personal Property of Others”.  You are able to choose the desired limit of coverage and it must be combined with coverage for your own business personal property or building.

 In this case, a class action lawsuit was filed against Nextel (or its agent) for sending unsolicited fax blasts in violation of the TCPA. The TCPA is a federal law making it unlawful to use a fax, computer, or other device to send an unsolicited advertisement to a fax machine. Each fax sent in violation can result in the greater of actual damages or $500.

 Transportation Insurance Company argued that the “advertising injury” coverage under its General Liability must be for “oral or written publication of material that violates a person’s right of privacy”. And, in the present case, no private content was communicated in the advertisement.

 However, the court opined that the “right of seclusion” is a right of privacy that is provided for under the TCPA. Therefore, the “advertising injury” coverage under the General Liability form does provide coverage for sending unsolicited fax advertisements in violation of the TCPA.

 In the Penzer case, the fax blast violation occurred in 2003. Since that time, the insurance industry has adopted form CG 00 67 03 05 entitled “Exclusion-Violation Of Statutes That Govern E-Mails, Fax, Phone Calls Or Other Methods Of Sending Material Or Information”. This policy endorsement should preclude coverage in the majority of these cases.

Source: John Sadler

Many General Liability policy forms have an exclusion which takes away coverage for a laundry list of professional services including legal, accounting, architectural, engineering, medical, health care and computer consulting, design, or programming services including web site design. 

Obviously, this presents a problem for tech compaines or IT professionals seeking General Liability coverage. But, the problem can be solved by an insurance professional who specializes in insuring tech and IT risks.

Carriers like The Hartford can add eliminate this harmful Professional Services exclusion by endorsing the policy to add back coverage for tech professional services. Hartford has a special endorsement entitled “Technology Services Coverage” for this purpose.

Tech Professionals with General Liability Carriers that don’t address the Professional Services Exclusion with a buyback endorsement may find needed coverage under a Professional Liability policy that offers a Contingent Bodily Injury / Property Damage endorsement.

Be sure to avoid these types of problems by dealing with a tech insurance specialist.

1. Bodily Injury And Property Damage Liability (General Liability)

2. Personal Injury And Advertising Injury Liability (General Liability or Errors & Omissions Liability)

3. Negligent Acts, Errors, Omissions In Performance Of Professional Services Resulting In Economic Damages (Errors & Omissions Liability)

4. Intellectual Property Infringements such as copyright, trademark, etc. (Media Liability)

5. Breach Of Security (Unauthorized Access, Computer Virus, Denial Of Service)