10.2 CGL Coverage B: Personal and Advertising Injury, Coverage C: Medical Payments

Coverage B: Personal and Advertising Injury Liability

While Coverage A responds to physical harm (BI/PD), Coverage B responds to a defined list of non-physical, offense-based injuries. The trigger is different: Coverage B applies to 'personal and advertising injury' caused by an offense arising out of the insured's business, committed during the policy period - not an 'occurrence.'

The ISO definition of personal and advertising injury enumerates seven offenses. Memorize these for the exam; they are frequently tested individually.

The Seven Coverage B Offenses

Note that patent and trademark infringement are NOT covered under Coverage B - only copyright, trade dress, and slogan in the insured's advertisement. This is a classic distractor.

Coverage B Limits and Exclusions

Coverage B has its own Personal and Advertising Injury Limit (often equal to the Each Occurrence limit, e.g., $1,000,000), and it is subject to the General Aggregate. Like Coverage A, defense costs are paid in addition to the limit.

Key Coverage B exclusions include: injury caused by the insured with knowledge it was false; material published before the policy period; criminal acts; breach of contract (except implied contract to use another's advertising idea); and quality/performance of goods in advertising (failure of goods to conform to advertised statements). Media and internet-type businesses are also restricted.

Coverage C: Medical Payments

Coverage C pays medical expenses for bodily injury caused by an accident on premises the insured owns/rents, on ways next to those premises, or because of the insured's operations - regardless of fault. This is goodwill, no-fault coverage designed to settle minor injuries quickly and discourage liability suits.

Medical expenses must be incurred and reported within a stated time (typically the injury must occur during the policy period and expenses incurred within one year of the accident date). Coverage C pays reasonable expenses for first aid, medical/surgical/dental services, and necessary ambulance, hospital, and funeral services.

Coverage C Limit, Persons Excluded, and a Worked Example

The Medical Expense Limit is a low per-person sublimit, commonly $5,000 or $10,000 per person, and it is subject to the General Aggregate. Coverage C does not apply to: the named insured or its employees (covered by workers' comp), tenants, athletic-participation injuries, or anyone covered by workers' compensation.

Worked example: A customer slips in the insured's store and incurs $4,200 in medical bills. The Medical Expense Limit is $5,000 per person. Under Coverage C, the insurer pays the $4,200 without any liability determination - fault is irrelevant. If the customer instead sued and obtained a $60,000 judgment, that claim would shift to Coverage A (Each Occurrence limit), not Coverage C.

Coverage B: The Named Offenses

CGL Coverage B — Personal and Advertising Injury Liability (ISO CG 00 01) does not cover bodily injury or property damage. Instead it responds to a closed list of named offenses, which you should memorize:

1. False arrest, detention, or imprisonment
2. Malicious prosecution
3. Wrongful eviction or wrongful entry / invasion of the right of private occupancy
4. Oral or written publication that slanders or libels a person or organization
5. Oral or written publication that violates a person's right of privacy
6. The use of another's advertising idea in your advertisement
7. Infringing upon another's copyright, trade dress, or slogan in your advertisement

Unlike Coverage A, there is no occurrence requirement — the trigger is the commission of a listed offense during the policy period.

Coverage C and a Worked Comparison

Coverage C — Medical Payments pays reasonable medical expenses for bodily injury to a member of the public, regardless of the insured's fault, when the injury occurs on premises the insured owns/rents or because of the insured's operations. The default limit is $5,000 per person, and the expense must be incurred and reported within a stated period (commonly one year). It does not apply to the insured, employees, tenants, or anyone whose injury arises from a business excluded under Coverage A.

Worked example: a customer trips in a store and the merchant, wanting goodwill, asks the insurer to pay the $3,000 ER bill. Coverage C pays without a liability finding. If the customer later sues for $200,000 alleging negligence, Coverage A (BI) responds and any Coverage C payment is typically credited against the damages. Trap: Coverage C is no-fault goodwill; Coverage A requires legal liability.

Coverage B Exclusions and the Advertising Nexus

Coverage B's seven named offenses are narrowed by exclusions the exam tests: injury caused by the insured with knowledge of falsity; material published before the policy period; criminal acts; breach of contract; offenses by businesses in advertising, broadcasting, or internet media/design (their core operations need a media-liability policy); and intellectual-property infringement except the specifically covered copyright, trade dress, and slogan in an advertisement.

For the advertising offenses, there must be a genuine advertisement — a notice broadcast to the general public about the insured's goods/services. Worked example: a retailer's ad copies a competitor's slogan; Coverage B's 'use of another's advertising idea / slogan infringement' responds. But if the same retailer is in the business of designing ads for others and is sued for a client's campaign, the media exclusion bars Coverage B. Trap: patent and trademark infringement are not covered offenses — only copyright, trade dress, and slogan in the insured's own advertisement.