How the Unsolicited Communications Exclusion Affects Business Insurance Policies

By Jenny Holly Hansen | WBN News | August 20, 2025

In today’s business world, communication is constant—emails, text messages, phone calls, and social media outreach are all part of the daily routine. However, when communication crosses into the realm of “unsolicited” or unwanted contact, it can create legal challenges that many business owners overlook. This is where the unsolicited communications exclusion in business insurance policies becomes important.

What Is the Unsolicited Communications Exclusion?

The unsolicited communication exclusion is a clause often found in general liability or cyber policies. It limits or removes coverage for claims that arise from sending communications without the recipient’s consent. This can include:

Spam emails or texts sent without proper opt-in.
Telemarketing calls to individuals on “do not call” lists.
Fax advertisements (still a regulatory issue in some jurisdictions).
Social media messages considered harassing or unwanted.

In short, if a business is accused of sending unwanted messages, the insurer may deny coverage under this exclusion.

Why Does It Matter for Businesses?

Many businesses rely on outreach to grow. But even well-meaning marketing campaigns can unintentionally cross the line if proper consent is not obtained. For example:

A small manufacturer sends promotional emails to prospects they met at a trade show, but one recipient never opted in and files a complaint.
A financial services company hires a third-party marketer who cold-calls potential clients without following telemarketing rules.
A contractor texts past customers with seasonal promotions, not realizing consent was never formally documented.

In each of these situations, if the recipient sues for invasion of privacy or violation of communication laws, the business may discover that its insurance policy excludes coverage for defense costs and damages.

Regulatory Risks and Legal Exposure

The exclusion is closely tied to laws such as:

CAN-SPAM Act (United States) – governing email marketing.
CASL (Canada’s Anti-Spam Legislation) – one of the strictest anti-spam laws globally.
Telephone Consumer Protection Act (TCPA) – regulating telemarketing and text messages.
GDPR (General Data Protection Regulation) – in the EU, emphasizing consent and data protection.

Violating these rules can lead to fines, lawsuits, and reputational damage. Without insurance coverage, businesses are left to pay legal fees and penalties out of pocket.

Best Practices for Businesses

While the exclusion itself cannot be removed in most policies, businesses can take proactive steps to reduce risk:

Obtain and Document Consent – Always ensure customers and prospects have clearly opted in before sending marketing communications.
Maintain Updated Contact Lists – Regularly scrub lists against “do not call” registries or unsubscribe requests.
Vet Third-Party Marketers – If outsourcing, confirm that your vendors follow all relevant laws.
Review Insurance Policies – Understand exactly what your coverage includes and excludes, particularly regarding privacy and communication.
Consider Specialized Coverage – Cyber liability or media liability policies may provide broader protections for certain communication-related risks.

Final Thoughts

The unsolicited communication exclusion is a reminder that insurance does not replace compliance. Businesses must balance their marketing strategies with legal requirements to avoid gaps in protection. By being proactive with consent, communication practices, and insurance reviews, business owners can reduce the risk of costly surprises.

Let’s Keep Talking:

Jenny is a business insurance broker with Waypoint Insurance. With 19 years experience, she will well versed in the technical aspects of business coverages.

She can be reached at 604-317-6755 or jholly-hansen@wbnn.news. Connect with Jenny on LinkedIn at https://www.linkedin.com/in/jenny-holly-hansen-365b691b/.

TAGS: #Jenny Holly Hansen #Business Insurance Canada #Unsolicited Communications Exclusion # General Liability #Cyber Risk