Court of Appeals holds Auto Owners must defend unsolicited facsimile claim

Last week the Court of Appeals rejected Auto Owners' attempt to deny coverage to a business it insured, Tax Connection Worldwide.  The Defendant was sued by businesses to whom it had sent unsolicited facsimile advertisements (i.e., "faxes.").  Since sending mass fax advertising is illegal, Auto Owners argued it owed no duty to defend the claim.  It also argued that the coverage was voided because the manager of TCW initially denied that his company sent the faxes.  

The Appellate panel pointed out that among the coverage purchased was coverage for "advertising injury" which clearly included the claim brought by the complaining companies.  It also rejected the argument that coverage is voided because the insured did not immediately acknowledge the truth of the advertising claim.