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

CGL Coverage B: Personal and Advertising Injury Liability

Coverage B broadens the CGL beyond physical BI/PD to cover certain intangible torts committed in the conduct of the business. The current CG 00 01 04 13 combines 'personal injury' and 'advertising injury' into a single defined term: personal and advertising injury. Like Coverage A, Coverage B carries a duty to defend and is subject to the General Aggregate plus a Personal and Advertising Injury Limit (often equal to the each-occurrence limit, e.g., $1,000,000).

The seven covered offenses

Coverage B applies only to injury arising out of one or more of these enumerated offenses - if the wrong is not on this list, there is no coverage:

1. False arrest, detention, or imprisonment
2. Malicious prosecution
3. Wrongful eviction, wrongful entry, or invasion of the right of private occupancy (of a room/dwelling/premises the person occupies)
4. Oral or written publication of material that slanders or libels a person or organization
5. Oral or written publication of material 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

Note the offenses are based on conduct, not on an 'occurrence' - so there is no accident requirement, but several exclusions (knowing falsehood, criminal acts, breach of contract, prior publication) cut coverage back.

Key Coverage B exclusions (frequent traps)

• Knowing violation of rights of another - if the insured knew the act would violate rights and inflict injury.
• Material published with knowledge of falsity - knowingly false libel/slander is not covered.
• Material first published before the policy period (prior publication).
• Criminal acts committed by or at the direction of the insured.
• Breach of contract, except an implied contract to use another's advertising idea.
• Quality or performance of goods ('failure to conform to statements').
• Infringement of patent, trademark, or trade secret - these are EXCLUDED; only copyright, trade dress, and slogan in your advertisement are covered. Patent and trademark infringement are common wrong-answer distractors.

Coverage C: Medical Payments

Coverage C (Medical Payments) pays reasonable medical expenses without regard to fault (no negligence needed) 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. It is goodwill coverage designed to settle small injuries quickly and discourage liability suits.

Conditions to be tested:

• The accident must take place in the coverage territory and during the policy period.
• Expenses must be incurred and reported within one year of the date of the accident.
• The injured person submits to exams by the insurer's chosen physicians as often as reasonably required.
• Default sub-limit is $5,000 per person (a Medical Expense Limit shown in the declarations).

Coverage C exclusions and the A/C relationship

Medical Payments will NOT pay for injury to:

• An insured (other than a volunteer worker in some cases).
• An employee injured in the course of employment (that is workers compensation).
• A tenant injured on a normally-occupied portion of the rented premises.
• Anyone taking part in athletics.
• Injury covered by the products-completed operations hazard or war.

If a Med Pay claim later becomes a liability suit, amounts already paid under Coverage C are typically credited against any Coverage A damages.

Worked numeric: Coverage B limit and aggregate interaction

Assume a Personal and Advertising Injury Limit of $1,000,000 and a General Aggregate of $2,000,000. Earlier in the year, Coverage A premises claims have already eroded $1,500,000 of the general aggregate, leaving $500,000.

A libel suit under Coverage B now settles for $800,000. Even though the Personal and Advertising Injury Limit is $1,000,000, the insurer can pay only the $500,000 remaining in the general aggregate, because Coverage B shares the same general aggregate as Coverage A. The insured absorbs the $300,000 gap. This illustrates why high-litigation businesses (publishers, advertisers, media) often buy higher aggregates or a media liability policy rather than relying on the CGL's shared aggregate.

Coverage B vs. Coverage A: tested distinctions

A recurring exam theme is sorting a fact pattern into the correct insuring agreement. Coverage A requires bodily injury or property damage caused by an occurrence (accident). Coverage B requires one of the seven enumerated offenses and has no occurrence/accident requirement - the offense itself triggers coverage.

• A defamatory press release => Coverage B (offense 4, libel/slander).
• A customer hurt by a falling display => Coverage A (bodily injury) and possibly Coverage C (no-fault med pay).
• Wrongful eviction of a tenant => Coverage B (offense 3).
• Use of a rival's slogan in an ad => Coverage B (offense 7).

Both Coverage A and Coverage B carry the duty to defend and share the general aggregate; Coverage C does not provide a defense and erodes the general aggregate as a sub-limit.