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

The CGL Insuring Agreements

The ISO Commercial General Liability form (CG 00 01) splits liability into three coverages, each with its own insuring agreement and exclusions:

• Coverage A — Bodily Injury (BI) and Property Damage (PD) liability.
• Coverage B — Personal and Advertising Injury liability.
• Coverage C — Medical Payments (no-fault, goodwill payments regardless of liability).

Knowing which coverage answers a given loss is one of the most-tested CGL concepts.

Bodily Injury (BI)

The CGL defines bodily injury as "bodily injury, sickness, or disease sustained by a person, including death resulting from any of these." Key points the exam targets:

• It requires physical harm — purely emotional or mental distress without physical injury is often disputed/excluded under Coverage A.
• Death is included when it results from the injury.
• BI to the insured's own employees is excluded by the employer's liability exclusion (that exposure belongs to Workers' Compensation / Employers Liability).

Property Damage (PD)

Property damage means: (1) physical injury to tangible property, including resulting loss of use; or (2) loss of use of tangible property not physically injured. Two exam traps:

• Electronic data is not tangible property under the standard CGL definition.
• Loss of use alone counts as PD even with no physical damage — e.g., a contractor blocks access to a store, causing lost business use of the premises.
• The "your work" and "your product" exclusions remove coverage for damage to the insured's own completed work or product (the business-risk doctrine).

Coverage A Limits Structure

Coverage A is controlled by a set of limits applied in a specific order. A typical small-business CGL might read:

Worked Aggregate Example

A business has a $1,000,000 each-occurrence limit and a $2,000,000 general aggregate. During the policy year it has three covered occurrences: $800,000, $700,000, and $900,000.

• Each individual loss is within the $1,000,000 occurrence cap, so each is fully payable on its own.
• But the aggregate caps total payments at $2,000,000. Paid: $800,000 + $700,000 = $1,500,000, leaving $500,000 of aggregate. The third $900,000 loss is paid only up to the remaining $500,000.
• Total insurer payout: $2,000,000; the insured absorbs $400,000.

Coverage B — Personal and Advertising Injury

Personal and advertising injury covers a closed list of offenses, not accidental bodily harm. The named offenses include false arrest/detention, malicious prosecution, wrongful eviction or invasion of privacy of a dwelling, slander or libel (oral/written defamation), disparagement of goods or services, and infringement of copyright, slogan, or title in an advertisement.

Note the traps: ordinary patent and trademark infringement is generally excluded, and offenses committed with knowledge of falsity or before the policy period are excluded. Coverage B shares the general aggregate with Coverage A.

Patent and Trademark Trap

Coverage B reaches copyright, slogan, and title infringement in your advertisement — but patent and trademark infringement are excluded. Candidates routinely choose "trademark infringement" as a covered offense; it is not. Specialty intellectual-property or media liability policies handle patent/trademark exposure.

Damages "Because Of" — Defense Outside Limits

CGL pays damages plus a duty to defend that is broader than the duty to indemnify and whose costs are paid in addition to the limits (a key contrast with claims-made professional forms where defense often erodes the limit). Once the limit is exhausted by settlements/judgments, the duty to defend ends.

Bodily Injury vs. Property Damage Definitions

• Bodily injury = physical injury, sickness, or disease, including death that results.
• Property damage = physical injury to tangible property plus loss of use of property not physically injured.

Pure economic loss, mental anguish without physical injury (in many forms), and electronic data (excluded as "tangible property") are common distractors on the definitions question.

Property Damage Definition Recap

For CGL purposes property damage means physical injury to tangible property, including loss of use, and loss of use of tangible property not physically injured. Electronic data is expressly not tangible property, so corrupted data is not "property damage" under the base form (a data endorsement or cyber policy is needed). Pure financial loss without physical injury is likewise outside the definition — recurring distractors.

Personal vs. Advertising Injury Split

Personal injury offenses (false arrest, malicious prosecution, wrongful eviction, slander/libel, invasion of privacy) can arise from the insured's general operations. Advertising injury offenses (disparagement, copyright/slogan/title infringement) arise in the course of advertising the insured's goods. Both live in Coverage B and share the general aggregate, but only advertising injury requires the offense to occur in an advertisement — a tested nuance.