Fax Blast Class Action Lawsuits

In the Florida Supreme Court case of Penzer v. Transportation Insurance Company, the court ruled that the standard General Liability policy form covers lawsuits alleging that fax blasts are in violation of the federal Telephone Consumer Protection Fax machineAct (TCPA).

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 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

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Categories: General Liability, Personal / Advertising Injury

Are Your Laptops Secure?

Laptops are the most common source of data breach

Many employees disable the encryption solutions on their laptops, putting their employers at risk for data breaches, according to a study by Absolute Software Corp. and The Ponemon Institute.

stolen laptopThe study specifies that corporate America is being affected by the behavior of employees who destabilize data protection.  This behavior is resulting in encryption not being enough to protect laptops and other mobile devices that have sensitive information stored on them.  The number one source of data loss is from lost or stolen laptops.   The survey results reveal that 75 percent of companies experiencing the theft or loss of an employee laptop will incur a data breach.

Business owners aren’t taking the necessary safety measures to secure their laptops.  Some business managers even deactivate their laptops’ encryption making themselves and their clients more vulnerable to identity theft.  Additional layers of security can be utilized to identify data that has been accessed, delete sensitive information remotely, and even find a lost or stolen laptop.  Employers cannot afford to rely on the behavior of their employees nor encryption technology to provide the data protection they need according to this study.

Source: Absolute Ponemon, insurancejournal.com, 27 Apr. 2009

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Categories: Breach Of Security, Crime, General Liability, Identity Theft, Risk Management

Most Common Sources of Tech Lawsuits

IT ProfessionalIT professionals such as computer consultants, web designers, programmers, system integrators, etc. face lawsuit risks from their clients and users of their client’s services. The most common sources of tech lawsuits and corresponding insurance policies are outlined below:

  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)
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Categories: Errors & Ommissions, General Liability, Professional Liability