Understanding the Unsolicited Communication Exclusion in Business Insurance

By Jenny Holly Hansen | WBN News | September 23, 2025

When reviewing a business insurance policy, the fine print often contains exclusions that can significantly limit coverage. One of the most overlooked is the Unsolicited Communication Exclusion—a clause that has become increasingly common as businesses engage in marketing, email campaigns, and digital outreach.

This exclusion is especially relevant in today’s business environment, where communication is both essential for growth and heavily regulated.

What Is the Unsolicited Communication Exclusion?

The unsolicited communication exclusion is a provision in many liability policies (particularly Commercial General Liability (CGL) and Cyber Liability/Errors & Omissions policies) that denies coverage for claims arising from unsolicited communications.

In plain language, it means that if your business is accused of sending messages—such as emails, texts, faxes, or even direct mail—without proper consent, your insurance will not step in to cover legal costs, settlements, or damages related to that claim.

Why Does It Exist?

This exclusion is largely a response to laws and regulations surrounding communication and privacy. Regulations like Canada’s Anti-Spam Legislation (CASL), the U.S. Telephone Consumer Protection Act (TCPA), and similar rules in other countries place strict limits on how businesses can contact individuals.

Violating these laws—intentionally or unintentionally—can result in lawsuits or government penalties. Because of the high frequency and severity of these claims, insurers add the exclusion to shift the risk back onto the business.

Examples of When the Exclusion Could Apply

• Email Marketing: A company sends a bulk email campaign without proper consent, and recipients file a complaint.
• Text Messaging: A retailer texts promotions to customers who didn’t opt in.
• Fax Advertising: Though less common today, fax blasts to businesses can trigger lawsuits under certain laws.
• Telemarketing Calls: Cold calls made without compliance with do-not-call lists.

In each of these scenarios, the insurer may deny coverage under the unsolicited communication exclusion.

Why Businesses Should Care

For many businesses, communication is at the heart of marketing and sales. What seems like a harmless newsletter or promotional campaign can actually expose your company to significant financial risk if it violates anti-spam laws. Without coverage, your business is left to pay for legal defense, fines, and settlements out of pocket.

For small and mid-sized businesses, this type of claim could be devastating.

Risk Management Tips

Even though insurance won’t cover claims under this exclusion, businesses can take proactive steps to reduce exposure:

1. Understand Consent Rules
   Ensure all email, text, and call campaigns comply with CASL, TCPA, or relevant laws in your region. Always secure express consent when possible.
2. Maintain Records
   Keep documentation of opt-ins, unsubscribe requests, and consent processes. This can serve as evidence if a complaint arises.
3. Use Reputable Platforms
   Partner with email marketing providers that enforce compliance measures and automatically manage unsubscribe functions.
4. Train Staff
   Make sure your marketing and sales teams understand the legal requirements around outreach.
5. Review Your Insurance
   While most policies exclude unsolicited communication claims, it’s worth discussing with your broker whether any specialized coverage exists or if endorsements can provide partial protection.

Final Thoughts

The unsolicited communication exclusion serves as a reminder that insurance is not a substitute for compliance. Businesses must build communication strategies that balance effective outreach with legal obligations. By being proactive, you can avoid costly disputes while continuing to connect with your customers in meaningful and compliant ways.

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 604-3177 or jhansen@waypoint.ca   

Connect with Jenny on LinkedIn at https://www.linkedin.com/in/jenny-holly-hansen-365b691b/.  

TAGS:  #Jenny Holly Hansen #Protect Your Business #Business Insurance #Unsolicited Communication Exclusion