Last week, the Eleventh Circuit held that an invasion-of-privacy exclusion in an insured’s policy barred coverage and that Liberty Insurance Underwriters Inc. did not have to cover the $60.4 million settlement of a class action against the insured, iCan Benefit Group LLC (iCan), for sending robotexts in alleged violation of the Telephone Consumer Protection Act. The exclusion for claims “arising out of” an invasion of privacy applies because the class claim has a connection with the invasion of privacy. The complaint doesn’t have to allege the common law tort of invasion of privacy to trigger the coverage exclusion.
The class action against iCan alleged that class members suffered “actual harm in the form of annoyance, nuisance, invasion of privacy.” After Liberty denied the request for coverage by iCan, iCan and class plaintiffs settled for $60.4 million and payment of that settlement was “not [to] be satisfied from or executed on any assets or property of iCan, [but] shall only be satisfied from Liberty.”