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

Coverage B - Personal and Advertising Injury Liability

Coverage B broadens the CGL beyond bodily injury and property damage to cover liability for specific intentional but non-physical torts. Unlike Coverage A, Coverage B does not require an 'occurrence' (accident) - the listed offenses are often deliberate acts of the insured's business that happen to cause legal liability.

'Personal and advertising injury' is a defined term covering injury, including consequential bodily injury, arising out of one or more of these seven enumerated offenses. Because the trigger is the commission of a listed offense rather than an accident, a deliberate business act (such as running a comparative advertisement) can be covered even though it was fully intended. The offenses split into personal-injury offenses (1-5) and advertising-injury offenses (6-7):

1. False arrest, detention, or imprisonment
2. Malicious prosecution
3. Wrongful eviction, wrongful entry, or 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

Coverage B limit and key exclusions

The Personal and Advertising Injury Limit is the most the insurer pays for all such injury sustained by any one person or organization. Payments erode and are subject to the general aggregate.

Frequently tested Coverage B exclusions:

• Knowing violation of the rights of another (the insured knew the act would violate rights and cause injury)
• Material published with knowledge of falsity (knowingly false libel/slander)
• Material first published before the policy period (prior publication)
• Criminal acts committed by or at the direction of the insured
• Contractual liability the insured assumed (with carve-backs)
• Breach of contract, except misappropriation of advertising ideas under an implied contract
• Wrong description of price, failure of goods to conform to advertised quality, and infringement of patent or trademark (patent/trademark infringement is NOT covered; only copyright, trade dress, and slogan in 'your advertisement' are)

Coverage C - Medical Payments

Coverage C pays reasonable medical expenses for bodily injury caused by an accident on premises the insured owns or rents, on ways next to those premises, or because of the insured's operations. The defining feature is that it is paid regardless of fault (no-fault goodwill coverage) - the injured person does not have to prove the insured was negligent.

Medical expenses must be incurred and reported within set timeframes:

• The accident must take place in the coverage territory and during the policy period.
• Expenses are paid if incurred and reported to the insurer within one year of the accident date.
• The injured person must submit to exams by the insurer's physicians as often as reasonably required.

The default Medical Expense Limit is $5,000 any one person, subject to the each-occurrence limit and the general aggregate. Coverage C is voluntary first-aid goodwill: the insurer pays without an admission of liability, which can prevent a minor incident from escalating into a Coverage A negligence suit. Higher medical-payments sublimits can be purchased by endorsement when foot traffic or premises exposure is significant.

Coverage C exclusions and the A vs C relationship

Coverage C does NOT pay medical payments to:

• Any insured (other than volunteer workers, in limited cases)
• A person hired to do work for any insured
• A person injured on the part of premises the person normally occupies (a tenant)
• Anyone entitled to workers compensation benefits
• Persons injured in products-completed operations or in war
• Bodily injury otherwise excluded under Coverage A

Relationship to Coverage A: Coverage C is a small no-fault first-aid benefit meant to settle minor injuries quickly and discourage lawsuits. If the injured party later sues, the matter shifts to Coverage A (which requires legal liability). Importantly, Coverage C medical payments and Coverage A BI/PD share the each-occurrence limit - they are not stacked separately for one occurrence.

Worked example - shared each-occurrence limit

A customer slips in a covered store accident. The CGL has a $1,000,000 each occurrence limit and $5,000 Coverage C medical expense limit. The insurer pays $4,000 under Coverage C for the customer's emergency care without contesting fault. The customer later sues and a $700,000 BI judgment is awarded under Coverage A.

• Coverage C paid: $4,000 (within the $5,000 sublimit).
• The each-occurrence limit ($1,000,000) caps the sum of Coverage A BI/PD and Coverage C medical payments for one occurrence.
• Total drawn from the each-occurrence limit: $700,000 (A) + $4,000 (C) = $704,000, well within $1,000,000.

If the judgment had been $1,000,000, the $4,000 already paid under C would reduce what is available, because both share the single each-occurrence cap. This sharing is a classic exam point.

Coverage B vs. Coverage A - why both matter

Candidates routinely confuse the two liability coverages. Use this contrast table when a question describes a loss:

A defamation lawsuit against a business for a disparaging press release falls under Coverage B (libel/slander), not Coverage A, because there is no bodily injury or physical property damage. Conversely, a customer's broken leg from a slip-and-fall is Coverage A. Recognizing which coverage a fact pattern triggers - and that both share the general aggregate - is essential. Note that 'personal injury' in insurance vocabulary means the Coverage B offenses, NOT bodily injury, which trips up many test-takers from a liability-law background.