8.4 Bodily Injury, Property Damage, and Personal/Advertising Injury

Bodily Injury and Property Damage (Coverage A)

CGL Coverage A pays sums the insured is legally obligated to pay as damages because of bodily injury or property damage caused by an occurrence in the coverage territory.

• Bodily injury (BI) — physical injury, sickness, or disease, including resulting death. Note ISO definitions traditionally exclude purely emotional harm unless tied to physical injury.
• Property damage (PD) — has two prongs:
  1. Physical injury to tangible property, including resulting loss of use; and
  2. Loss of use of tangible property that is not physically injured.

Trap: PD covers loss of use even when nothing is physically broken — e.g., a contractor blocks access to a store, and the store loses business though the building is undamaged. Also, electronic data is not tangible property under the standard form.

An occurrence is defined as an accident, including continuous or repeated exposure to substantially the same harmful conditions.

Personal and Advertising Injury (Coverage B)

Coverage B is separate from Coverage A and does not require bodily injury or property damage. It responds to a list of named offenses, not to an 'occurrence.'

Personal injury offenses:

• False arrest, detention, or imprisonment
• Malicious prosecution
• Wrongful eviction or wrongful entry / invasion of private occupancy
• Oral or written publication that slanders or libels a person or organization
• Publication that violates a person's right of privacy

Advertising injury offenses (committed in the insured's advertising):

• Libel, slander, or disparagement in an ad
• Violation of privacy in an ad
• Misappropriation of advertising ideas or style of doing business
• Infringement of copyright, trade dress, or slogan in the advertisement

Trap: Patent and trademark infringement are generally excluded from advertising injury; only copyright, trade dress, and slogan are covered.

The Six-Limit CGL Structure

The CGL Declarations show six distinct limits. Coverage A and B share the per-occurrence/offense structure but feed into aggregates.

Aggregate Depletion Example

A CGL has a $2,000,000 General Aggregate and a $1,000,000 Each Occurrence limit. Early in the year a covered occurrence pays $1,000,000 (the full per-occurrence limit). A second occurrence later pays $700,000.

• Remaining General Aggregate = $2,000,000 - $1,000,000 - $700,000 = $300,000.
• A third occurrence costing $500,000 is paid only up to the $300,000 left; the insured absorbs $200,000.

Trap: The Each-Occurrence limit caps a single loss, but the aggregate caps the policy year. Defense costs are paid outside the limits and do not erode the aggregate on the standard CGL.

Coverage C — Medical Payments (No-Fault)

Coverage C pays reasonable medical expenses of an injured third party regardless of fault, up to about $5,000 per person, if the injury occurs on the insured's premises or from operations. It is goodwill, no-fault coverage designed to settle small claims quickly and discourage lawsuits.

Premises-Operations vs. Products-Completed Operations

Coverage A bodily injury and property damage splits into two exposure groups, and the exam tests which aggregate they erode.

Why the split matters: keeping completed-work and product claims in a separate aggregate means a string of product failures cannot exhaust the limits available for ongoing premises claims, and vice versa. A scenario describing harm from a product after it left the insured's control points to the products-completed operations aggregate, not the General Aggregate.

Trap: Damage to the insured's own product or own work is excluded (the 'your product' / 'your work' exclusions) — the CGL covers third-party harm the product causes, not the cost to replace the defective product itself.