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

Coverage B: Personal and Advertising Injury

Coverage B pays sums the insured is legally obligated to pay as damages because of personal and advertising injury. Unlike Coverage A, it is not triggered by an occurrence (an accident). Instead it is triggered by the commission of a listed offense during the policy period, and it does not require bodily injury or property damage to have occurred.

The Listed Offenses

Personal and advertising injury is defined as injury arising out of specific offenses:

• False arrest, detention, or imprisonment
• Malicious prosecution
• Wrongful eviction, wrongful entry, or invasion of the right of private occupancy
• Oral or written publication of material that slanders or libels (defamation) a person or organization
• Oral or written publication that violates a person's right of privacy
• The use of another's advertising idea in your advertisement
• Infringing on another's copyright, trade dress, or slogan in your advertisement

Coverage B Limits and Exclusions

Coverage B has its own Personal and Advertising Injury Limit (one limit per person or organization), and payments also erode the General Aggregate Limit.

Key exclusions include:

• Injury caused with knowledge of falsity (knowing it was false).
• Injury from material first published before the policy period.
• Breach of contract, except an implied contract to use another's advertising idea.
• Wrong description of goods, or failure to conform to advertised quality.
• Insureds in the media, broadcasting, or advertising business (their core operations).

Coverage C: Medical Payments

Coverage C pays reasonable medical expenses for bodily injury caused by an accident on premises the insured owns or rents, or arising from the insured's operations. The defining feature is that it pays without regard to fault - it is goodwill coverage designed to settle small injuries before they grow into liability suits under Coverage A.

Coverage C Conditions and Limit

For medical payments to apply:

• 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 accident date.
• The injured person submits to exams by physicians the insurer chooses.

The Medical Expense Limit is a per-person sublimit (often $5,000 or $10,000). It is part of and shares the Each Occurrence Limit - it is not additional money on top of Coverage A.

Coverage C Worked Example and Trap

A customer trips in a covered store and incurs $4,200 in medical bills. There is no clear negligence by the insured. Under Coverage C, the insurer pays the $4,200 (within a $5,000 sublimit) without proving fault, settling the matter quickly.

Exam trap: Coverage C does not apply to the insured, the insured's employees injured in the course of employment (that is workers compensation), tenants, or athletic-participant injuries. It is third-party-only goodwill coverage.

How Coverage B differs structurally from Coverage A

Candidates must keep the two liability grants straight. Coverage A responds to bodily injury and property damage caused by an occurrence (an accident), and the harm itself triggers coverage whenever the claim is later made on an occurrence form. Coverage B responds to a closed list of intentional-tort-style offenses and is triggered by the commission of the offense during the policy period - no accident, bodily injury, or property damage is required. A defamatory ad, a wrongful eviction, or copying a competitor's slogan are Coverage B losses even though no one was physically hurt.

The advertising-injury offenses and their traps

The two advertising offenses - using another's advertising idea in your advertisement, and infringing copyright, trade dress, or slogan in your advertisement - require that the harm arise out of the insured's advertisement. A general patent-infringement or trademark dispute that is not part of an advertisement is not covered; this narrowing is a frequent exam distractor. Likewise, the knowing-violation, prior-publication, and media-business exclusions strip Coverage B from the very businesses (publishers, broadcasters, ad agencies) whose core operations are publishing - they must buy media liability instead.

Why Coverage C settles claims cheaply

Because Coverage C pays small third-party medical bills without litigation or a finding of fault, insurers use it to extinguish minor injuries before they ripen into Coverage A lawsuits. The one-year reporting window and the modest per-person sublimit keep the exposure contained. If the injured party later sues alleging negligence, any amount already paid under Coverage C is typically credited against a Coverage A settlement, so the insured is not paying twice for the same injury.

Worked Coverage B scenario

A small retailer runs a print advertisement that copies a competitor's distinctive slogan. The competitor sues for use of another's advertising idea and slogan infringement - both listed Coverage B offenses committed in the insured's advertisement. Coverage B responds: it funds the defense (in addition to the limit) and pays damages up to the Personal and Advertising Injury limit, which also erodes the General Aggregate. If, however, the retailer had known the slogan was protected and used it anyway, the knowing-violation exclusion would bar coverage.

And if the retailer were itself in the advertising business, the media-business exclusion would push the exposure to a separate media-liability policy. This single fact pattern exercises the trigger (commission of an offense), the limit interaction, and two of the most-tested Coverage B exclusions at once - which is why advertising-injury scenarios appear so often on the exam.