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

The Two CGL Insuring Agreements

The ISO Commercial General Liability form (CG 00 01) provides two main liability coverages plus medical payments. Understanding the precise ISO definitions of each loss type is essential because exclusions and limits attach to those exact terms.

Coverage A — Bodily Injury and Property Damage

Bodily Injury (BI) under the CGL means "bodily injury, sickness, or disease sustained by a person, including death" resulting from it. Note it is physical — standard BI does not include purely emotional distress unless tied to physical harm.

Property Damage (PD) means physical injury to tangible property (including loss of use of that property) or loss of use of tangible property that is not physically injured. Tangible is the key word — electronic data is specifically declared not tangible property in the ISO form.

Coverage A is triggered by an occurrence, defined as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." An occurrence is not an intentional act — expected or intended injury is excluded.

Coverage B — Personal and Advertising Injury

Coverage B responds to injury arising from listed offenses, not from an occurrence. The ISO enumerated offenses include:

• False arrest, detention, or imprisonment
• Malicious prosecution
• Wrongful eviction or wrongful entry / invasion of privacy (right of private occupancy)
• Oral or written publication that slanders or libels 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 upon another's copyright, trade dress, or slogan in your advertisement

Note that patent and trademark infringement are generally excluded from Coverage B — a frequently tested distinction.

CGL Limits Structure (Worked Example)

The CGL uses several limits that interact. Assume: General Aggregate $2,000,000, Products-Completed Operations Aggregate $2,000,000, Each Occurrence $1,000,000, Personal & Advertising Injury $1,000,000, Damage to Premises Rented to You $300,000, Medical Payments $10,000.

• The Each Occurrence limit ($1M) is the most paid for any single occurrence (BI + PD combined), and it is also the most paid for Personal & Advertising Injury to any one person or organization.
• All Coverage A occurrence losses (other than products-completed operations) draw down the General Aggregate ($2M) over the policy period.
• Products-completed operations losses draw down their own separate aggregate ($2M), preserving the general aggregate.
• Damage to Premises Rented to You ($300,000) is a sublimit for fire (and short-term rentals) damage to premises rented to the insured — it does not add to the each-occurrence limit.

Numeric check: If two separate occurrences each cause $1.2M in BI/PD, the policy pays $1M per occurrence (each-occurrence cap), totaling $2M — which then exhausts the General Aggregate, leaving nothing for further general-liability losses that period.

Coverage C — Medical Payments (No-Fault)

Coverage C — Medical Payments of the CGL pays reasonable medical expenses for bodily injury to a person on the insured's premises or arising from the insured's operations, without regard to fault. It functions as a goodwill, fast-pay coverage — small dollars (a common limit is $5,000 to $10,000 per person) paid quickly to discourage a larger liability suit.

Medical payments are not available to the insured or the insured's employees (who look to workers' comp). Because no fault is required, candidates must distinguish Coverage C from Coverage A, which always requires legal liability before it responds.

How the Aggregates Reset and Interact

The General Aggregate is the most the policy will pay for the sum of Coverage A occurrences (other than products-completed operations), Coverage B offenses, and Coverage C medical payments during the policy period. The separate Products-Completed Operations Aggregate protects manufacturers and contractors from having their general aggregate drained by product or completed-work claims.

Both aggregates reset at each annual renewal — they are period limits, not per-claim limits. A key teaching point: the Each Occurrence limit governs a single loss event but operates inside the general aggregate, so a series of losses can exhaust the aggregate even when no single occurrence reaches the per-occurrence limit.

Worked Numeric: Personal & Advertising Injury Within the Aggregate

Using the earlier limits (General Aggregate $2,000,000; Each Occurrence / Personal & Advertising Injury $1,000,000): suppose the insured suffers one BI/PD occurrence costing $900,000 and a separate libel offense (Coverage B) costing $1,000,000. The occurrence pays $900,000 (under its $1M cap) and the offense pays $1,000,000 (its own cap and the per-person/organization cap). Total paid: $1,900,000 — drawn from the same $2,000,000 General Aggregate, leaving only $100,000 of general aggregate for the rest of the period. This illustrates that Coverage A and Coverage B share the general aggregate.

Exam Traps

• Tangible vs. intangible: Electronic data and purely financial/economic loss are not property damage under the CGL.
• Occurrence ≠ intentional: An occurrence is an accident; expected or intended injury is excluded from Coverage A.
• Patent/trademark: Not covered under Coverage B; only copyright, trade dress, and slogan used in your advertisement are covered.
• Coverage C is no-fault, but limited: It excludes the insured and the insured's employees, who turn to workers' comp.
• Aggregate exhaustion: Once the general aggregate is used up, the each-occurrence limit no longer matters — there is no money left, and Coverage A and B both draw from that single aggregate.