The Law

Policy Wording Puts Insurer on the Hook for Insured’s TCPA Violation

U.S. Bus Charter & Limo Inc. sent advertisement text messages to potential customers, violating TCPA laws. Now, its insurer faces $50 million in settlement fees.
By: | June 1, 2018 • 2 min read

U.S. Bus Charter & Limo Inc. (U.S. Coachways) decided to use the power of technology to communicate with potential customers. It sent text messages promoting deals on both bus and limousine rentals, in hopes of sparking business.


Unfortunately, the recipients of these texts found them to be in violation of the Telephone Consumer Protection Act (TCPA), which restricts solicitations like telemarketing and the use of automated telephone equipment. The recipients filed a class action suit against U.S. Coachways.

During the period the messages were sent, from December 2013 through April 2014, the rental service held a professional liability policy with Illinois Union Insurance Company.

U.S. Coachways notified its insurer of the class action, seeking indemnification under the policy. Illinois Union denied coverage, stating its policy did not cover TCPA wrongdoings.

Meanwhile, U.S. Coachways agreed to a settlement of nearly $50 million after the judge determined the messages were in violation of the TCPA.

As part of the agreement, U.S. Coachways assigned the class its right to challenge Illinois Union’s denial of coverage.

Illinois Union was proactive in its defense, suing both the class and U.S. Coachways and seeking a declaration its policy didn’t cover the settlement. James Bull, a named person in the class action, motioned for partial summary judgment.

In court, the policy was under scrutiny. A clause called the “Travel Agency Operations” provision stated advertisements “necessary or incidental to the conduct of travel agency business” as “attempted procurement for a fee or commission of travel, lodging or guided tour accommodations” were covered.

Illinois Union argued that, while the policy may state such ads were covered, the texts U.S. Coachways used were not “for others” or “for a fee.” The court didn’t budge. It concluded the policy covered TCPA violations. Bull’s motion for partial summary judgment was granted.

Scorecard: The policy language, while not explicitly covering or excluding TCPA violations, was found to say in as many words it did cover TCPA violations. Illinois Union is responsible for the underlying suit.

Takeaway: Vague or non-specific policy language can leave an insurer scrambling. It’s best to name any exclusions within the policy so that there is no ambiguity or confusion on the insured’s side. &

Autumn Heisler is the digital producer and a staff writer at Risk & Insurance®. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.


That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.


Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]