TALLAHASSEE, Fla.—The sending of unsolicited "blast" faxes, which violate the Telephone Consumer Protection Act, triggers coverage under a commercial general liability insurance policy that provides coverage for advertising injuries, the Florida Supreme Court ruled.

The policy interpretation question was put to the court from the 11th Circuit Court of Appeals, which found that the nature of a pending insurance dispute case rested on the unsettled question.

The case before the 11th Circuit, Michael Penzer vs. Transportation Insurance Co., involves a certified class of plaintiffs who originally sued Nextel South Corp. in 2003 for violating their privacy by sending blast advertisement faxes, which is a violation of the TCPA.

Nextel subsequently sued Sunbelt, a blast-fax advertising firm, and Southeast Wireless Inc., an authorized agent of Nextel, seeking indemnity and contribution for any liability. Nextel also alleged that Southeast Wireless hired Sunbelt to create a blast fax that it never authorized.

The plaintiff class then sued Southwest Wireless and settled the dispute in 2004. As part of that settlement, Southeast Wireless assigned its right to seek insurance coverage from its CGL insurer, Transportation Insurance Co., to the class.

In the ensuing action, Chicago-based Transportation Insurance argued that, based on the language of the CGL policy, it had no obligation to defend or indemnify Southeast Wireless. The U.S. District Court for the Southern District of Florida agreed, ruling that coverage under the CGL's advertising injury provision exists only when the content of the material published violates a person's right to privacy.

The plaintiff class appealed the decision to the 11th Circuit Court of Appeals, which then asked the Florida Supreme Court to answer whether TCPA violations are covered under CGL policies.

In disagreeing with the federal district court, the Supreme Court of Florida unanimously ruled that under Florida law, such TCPA infringements trigger coverage.

A majority of the judges concluded that the plain meaning of the policy provision, which provides coverage for a written publication of material that violates a person's right to privacy, provides coverage.

“The facts of the instant case demonstrate that there was a written dissemination of 24,000 facsimiles that violated the TCPA,” the majority of the court concluded. “Comparing the policy's language to (the facts of this case): there was a written publication (dissemination) of material (of 24,000 facsimiles) that violated a person's right of privacy (that violated the TCPA). Therefore, applying our plain meaning analysis, we hold that Transportation's insurance policy provides coverage for sending unsolicited fax advertisements in violation of the TCPA.”

Partially dissenting opinions held that the advertising injury provision in the CGL policy was ambiguous and therefore must be construed in favor of the policyholder.

Attorneys for the class and for Transportation Insurance were not immediately available for comment.