What happened: Hanover Insurance is asking a court to declare it owes no coverage to Body Candy over a class action alleging thousands of fake "last chance" sale emails.
Who's involved: Hanover Insurance (insurer), Cybercartel International Inc. d/b/a Body Candy (policyholder), class of Washington consumers (underlying plaintiffs).
What's at stake: $2 million per occurrence and $4 million aggregate in primary coverage, plus $1 million in umbrella coverage, plus defense costs.
Why it matters: The case tests standard commercial liability advertising-injury exclusions against Washington's booming wave of email marketing class actions under CEMA.
Where it stands: Complaint filed November 12, 2026.
A body jewelry company called Body Candy told its customers the sale was ending. Then it told them again the next day. And the day after that.
Now Hanover Insurance wants a federal court to confirm that none of it is its problem.
Hanover filed a complaint in the Western District of New York on November 12, asking the court to rule it has no duty to defend or pay out for its policyholder, Cybercartel International Inc. - the company behind online body jewelry brand Body Candy - in a Washington state class action alleging thousands of deceptive marketing emails.
The underlying suit, brought in King County Superior Court, alleges Body Candy sent commercial emails to Washington residents with subject lines like "Last Chance," "VERY Last Chance (50% OFF inside)," and "50% Off Your Order & {24 hrs only!}" - when the same or similar discounts were available again within days, sometimes the very next day. According to the class action filing, Body Candy ran its "buy one, get two free" promotion repeatedly from at least January 2024 through June 2026, sending "last chance" emails for the same deal on consecutive days.
One table in the underlying filing lists more than 30 such emails across that period.
Hanover is currently paying for Body Candy's defense under a reservation of rights - meaning it reserved the right to later argue it does not actually owe coverage. That is exactly what it is arguing now.
The core dispute: the policies cover "personal and advertising injury" caused by publishing material that violates someone's right of privacy. Hanover says that is not what happened here. The class action alleges Body Candy misrepresented the terms of its own sales - a false advertising claim, Hanover argues, not a privacy violation. Nobody's personal information was disclosed, published, or misused.
Even if the claims did fall within coverage, Hanover points to four separate policy exclusions. The broadest bars coverage for injury arising out of any action that violates a law regulating the "sending, transmitting, communicating or distribution of material or information." Hanover argues Washington's Commercial Electronic Mail Act - which specifically bans false or misleading subject lines in commercial emails - fits squarely within that exclusion.
The other three exclusions target injuries arising from wrong descriptions of prices, material published with knowledge of its falsity, and material first published before the policy period began.
The stakes are significant. The policies carry $2 million per-occurrence and $4 million aggregate primary limits, plus $1 million of umbrella coverage. The underlying class action seeks $500 in statutory damages for each offending email, triple damages, punitive damages, an injunction, and attorneys' fees - on behalf of a class the filing describes as numbering "at least thousands" of Washington residents.
Hanover also argues that even if some coverage exists, punitive damages cannot be covered under New York public policy, and that injunctive relief, restitution, and the other side's legal fees do not count as "damages" under the policies.
The case lands in the middle of a wave of litigation under Washington's Commercial Electronic Mail Act, or CEMA. Courts there have seen more than 25 such cases since 2023, according to a Perkins Coie analysis. A 2025 Washington Supreme Court decision confirmed that CEMA covers any false or misleading content in email subject lines - not just information disguising the commercial nature of a message - opening the door to claims targeting routine retail marketing emails.
For carriers writing commercial general liability coverage, the question Hanover is forcing is a practical one: when a policyholder gets hit with a CEMA class action over its own marketing emails, does the standard advertising-injury coverage even apply - and if it does, do the policy exclusions knock it straight back out?
The allegations in the complaint have not been tested, and no court has made any ruling on the merits.
