CGL Personal Injury, Medical Payments and Limits
Key Takeaways
Coverage B requires a defined offense rather than generic financial harm.
Coverage C has claimant and activity exclusions.
Medical payments share applicable occurrence and aggregate constraints.
Products-completed and general aggregates are distinct.
CGL Personal Injury, Medical Payments and Limits
Coverage B uses specified personal/advertising offenses while Coverage C pays qualifying medical expenses without negligence. Occurrence, per-person and aggregate limits cap different categories of payment.
Coverage B: Personal and Advertising Injury Liability
Coverage B protects the insured against legal liability arising out of specified intentional and economic offenses rather than physical bodily harm or tangible property destruction. The policy defines "Personal and Advertising Injury" as injury arising out of one or more of seven enumerated offenses committed in the coverage territory during the policy period:
- False arrest, detention, or imprisonment;
- Malicious prosecution;
- Wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling, or premises committed by or on behalf of its owner, landlord, or lessor;
- Oral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person's or organization's goods, products, or services;
- Oral or written publication, in any manner, of material that violates a person's right of privacy;
- The use of another's advertising idea in your "advertisement";
- Infringing upon another's copyright, trade dress, or slogan in your "advertisement".
Key Coverage B Exclusions
Exclusions under Coverage B include: knowing violation of rights of another; material published with knowledge of falsity; material published prior to the policy period; criminal acts; contractual liability; breach of contract; failure of goods to conform to quality or performance statements in advertisements; wrong description of prices; and infringement of trademark, patent, or trade secret (other than copyright, trade dress, or slogan).
Coverage C: Medical Payments
Coverage C provides goodwill, no-fault medical reimbursement designed to handle minor injuries promptly, mitigating the likelihood of contentious third-party liability lawsuits.
Insuring Agreement & Mandatory Conditions
- The insurer pays necessary medical, surgical, x-ray, dental, ambulance, hospital, professional nursing, and funeral expenses for bodily injury caused by an accident:
- On premises owned or rented by the named insured;
- On ways immediately adjoining premises owned or rented; or
- Because of the named insured's ongoing operations.
- Strict 1-Year Time Limitation: The medical expenses must be incurred and reported to the insurer within 1 year (12 months) of the date of the accident.
- No-Fault Principle: Payment is made regardless of legal liability or fault. The claimant does not have to demonstrate negligence by the insured.
Coverage C Exclusions
Coverage C does not apply to: insureds other than the stated volunteer-worker exception; any person hired to do work for or on behalf of any insured or a tenant; any person injured while practicing or participating in physical athletic activities; any person entitled to workers' compensation benefits; or any injury included within the products-completed operations hazard.
Supplementary Payments (Coverages A and B)
Supplementary Payments cover defense costs and associated legal expenses incurred by the insurer in defending a suit under Coverage A or B. Crucially, Supplementary Payments are paid outside (in addition to) declared policy limits, meaning they do not reduce the Each Occurrence Limit or Aggregate limits:
- All expenses incurred by the insurer (investigation costs, independent expert fees, adjuster charges, defense attorney billings).
- Up to $250 for the cost of bail bonds required because of accidents or traffic law violations arising out of the use of any vehicle to which bodily injury liability applies.
- The cost of bonds to release attachments, within the available limit of insurance.
- Reasonable expenses incurred by the insured at the insurer's request to assist in investigation or defense, including actual loss of earnings up to $250 per day because of time off from work.
- Court costs taxed against the insured under the form, excluding taxed attorneys’ fees/expenses. Do not assume every sanction is an insured defense expense.
- Prejudgment interest awarded against the insured before the insurer offers to pay its limit, and all postjudgment interest accruing after entry of judgment until the insurer has paid or tendered its limit.
CGL Policy Limits Architecture
The standard ISO CGL policy utilizes a multi-tiered limit structure that caps insurer liability across individual occurrences and cumulative policy periods:
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| CGL LIMITS ARCHITECTURE |
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| |
| [ GENERAL AGGREGATE LIMIT ] [ PRODUCTS-COMPLETED OPERATIONS AGG. ] |
| (Max for Cov A [excl PCOH], Cov B, Cov C) (Dedicated max for PCOH claims only) |
| | |
| +-----------------------------------+ |
| | | |
| v v |
| [ EACH OCCURRENCE LIMIT ] [ PERSONAL & ADV. INJURY LIMIT ] |
| (Max for Cov A + Cov C per occ.) (Max for Cov B per person/org) |
| | | |
| v v |
| [ DAMAGE TO PREMISES ] [ MEDICAL EXPENSE LIMIT ] |
| [ RENTED TO YOU LIMIT] (Example USD 5,000 per person, |
| (Example USD 100,000) sub-limit of Cov A occ.) |
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| Limit Designation | Scope & Application | Illustrative Declarations Amount |
|---|---|---|
| General Aggregate Limit | Maximum sum payable during a single policy period for all losses under Coverage A (excluding Products-Completed Operations), Coverage B, and Coverage C combined. | $2,000,000 |
| Products-Completed Operations Aggregate Limit | Completely separate annual aggregate capping total bodily injury and property damage payments for the products-completed operations hazard. | $2,000,000 |
| Each Occurrence Limit | Maximum payable for the sum of all damages under Coverage A and medical expenses under Coverage C arising out of any single occurrence. | $1,000,000 |
| Personal & Advertising Injury Limit | Maximum payable under Coverage B for all damages sustained by any one person or organization; erodes the General Aggregate. | $1,000,000 |
| Damage to Premises Rented to You Limit | Maximum payable for property damage to premises rented to or temporarily occupied by the insured (traditionally fire damage caused by tenant negligence); sub-limit of Each Occurrence Limit. | $100,000 |
| Medical Expense Limit | Maximum payable under Coverage C for all medical expenses resulting from bodily injury to any one person; sub-limit of Each Occurrence and General Aggregate limits. | $5,000 |
The subcontractor exception is limited
The standard your-work exclusion has an exception for qualifying work performed on the insured's behalf by a subcontractor. That removes this particular exclusion for the described circumstances. It does not establish an occurrence, eliminate other exclusions, pay to finish incomplete work or guarantee every construction-defect claim. An endorsement may remove the exception. Distinguish damage to the completed work from damage to unrelated property, and identify who performed each damaged component before applying the form.
Which statement accurately describes the conditions and requirements governing Coverage C (Medical Payments) under the standard Commercial General Liability policy?
Expenses must be incurred and reported to the insurer within 1 year of the accident date, and coverage is provided on a no-fault basis without requiring proof of legal liability
Expenses must be incurred within 3 years of the accident date, and the claimant must prove the insured was legally negligent in maintaining the premises
Coverage C covers accidental injuries sustained by the named insured and the named insured's direct employees while working on the business premises
Coverage C provides unlimited medical benefits subject only to the policy's General Aggregate limit, requiring suit filing within 60 days
Under the Supplementary Payments section of the ISO Commercial General Liability policy, which of the following expenses is covered in addition to (outside) declared policy limits?
Customer emergency room bills paid under Coverage C up to $5,000
Damages awarded for trademark infringement under Coverage B up to $50,000
The cost to tear out and replace a subcontractor's defective foundation under Coverage A
Defense costs, up to $250 for required bail bonds, and the insured's lost earnings up to $250 per day for attending court at the insurer's request
Sections you finish are checked off in the contents.