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

Coverage B: Personal and Advertising Injury Liability

Coverage B (Section I, Coverage B of CG 00 01) responds to offense-based injuries that have nothing to do with a physical accident. It pays sums the insured is legally obligated to pay as damages because of personal and advertising injury caused by an offense arising out of the business, plus defense costs. Unlike Coverage A, there is no "occurrence" requirement - the trigger is the commission of a listed offense during the policy period.

The defined offenses (memorize the list - the exam tests them by example):

• 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 a person or organization or disparages goods/products
• Oral or written publication 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

Coverage B Limit Structure

Coverage B has its own Personal and Advertising Injury Limit, a single limit per person or organization. These payments also erode the General Aggregate Limit, but Coverage B is not subject to the Each Occurrence Limit because no occurrence is required - the trigger is the commission of an offense. This means the same general aggregate is shared by Coverage A premises-operations, Coverage B, and Coverage C medical payments, so a large advertising-injury verdict can reduce the dollars available for an unrelated bodily-injury claim later in the same policy year.

Frequently tested Coverage B exclusions:

• Knowing violation of the rights of another (intentional offense).
• Material published with knowledge of falsity - protects honest mistakes, bars deliberate lies.
• Material first published before the policy period (no prior-publication coverage).
• Breach of contract (except implied advertising contracts).
• Quality or performance of goods - failure to conform to statements (if the insured's product fails to live up to its own advertising).
• Infringement of patent or trademark - copyright, trade dress, and slogan ARE covered, but patents and trademarks are not.

This is a classic distractor.

• The insured in the business of advertising, broadcasting, publishing, or telecasting - media businesses need a separate media liability policy.
• Electronic chatrooms or bulletin boards the insured hosts, owns, or controls, and unauthorized use of another's name or product in a domain name or metatag.

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 out of the insured's operations - regardless of fault. It is a goodwill / no-fault coverage designed to pay small injuries quickly and head off larger liability suits.

Key mechanics:

• Expenses must be incurred and reported within one year of the accident date.
• The standard Medical Expense Limit is $5,000 per person (any one person).
• Coverage C payments reduce the General Aggregate and also reduce the Each Occurrence Limit available under Coverage A for the same occurrence.
• Pays first aid, medical/surgical/dental/x-ray, ambulance, hospital, professional nursing, and funeral expenses.

Trap: Coverage C does not apply to an insured, an employee (use WC), a tenant, or to anyone injured while taking part in athletics. It also will not pay for BI to a person hired to do work for the insured or for any injury already excluded under Coverage A. It is strictly a no-fault top layer for members of the public who are not insureds, designed to preserve goodwill and discourage litigation.

Comparing the Three Coverages

Worked example: A customer slips on a wet floor and incurs $4,200 in medical bills. Under Coverage C the insurer pays the $4,200 with no fault inquiry. If the customer later sues alleging negligence and wins $60,000, Coverage A responds; the $4,200 already paid is credited against the Coverage A settlement so the insured does not recover twice.

Why the Distinction Matters on the Exam

The exam frequently presents a fact pattern and asks which coverage part responds. Use this decision sequence. First, is there a physical accident causing bodily injury or property damage? If yes and the insured is legally liable, Coverage A applies. Second, is the harm one of the listed non-physical offenses (defamation, privacy, wrongful eviction, advertising infringement)? If yes, Coverage B applies even with no accident. Third, is it a minor injury to a member of the public where the insured wants to pay quickly without admitting fault? Coverage C applies up to $5,000 per person.

Remember that a single event can trigger more than one coverage - the wet-floor example pays under Coverage C immediately and may later pay under Coverage A, with the medical-payments amount credited so there is no double recovery.

Edition and Form Notes

The national exam tests the ISO CGL family by function, not by reciting form numbers, but knowing the numbers prevents trick questions. CG 00 01 is the occurrence Coverage Form; CG 00 02 is the claims-made Coverage Form. The CG DS 01 is the declarations.

Common endorsements include CG 20 10 (additional insured - owners, lessees, or contractors for ongoing operations) and CG 20 37 (additional insured for completed operations). The 2013 editions introduced revised pollution and data-breach language, and the most recent ISO multistate revisions refined the definitions of "bodily injury" and amended the additional-insured endorsements to follow written-contract requirements.