The insured failed in an attempt to get an indemnity under a liability policy covering ‘damages’ for statutory damages sought by the Federal Trade Commission.
The insured had made telephone calls in breach of the Telephone Consumer Protection Act (TCPA) to numbers on the National Do Not Call Registry. The FTC asked for statutory damages up to $1 500 per violation.
The courts in Colorado where the proceedings took place have previously found that TCPA damages are punitive and uninsurable both because they are not insurable damages and because Colorado’s public policy prohibits the insurability of such penalties and bars coverage.
The FTC also sought an injunction against future TCPA violations by the insured. The insured contended the cost of complying with such an injunction would be insurable damages. The court said that, under the plain language of the policies, the insurer was only obliged to indemnify damages arising from past injuries and not the cost of preventing future violations.
The case is Ace American Insurance Co. v Dish-Network LLC.