8.4 Bodily Injury, Property Damage, and Personal/Advertising Injury
Key Takeaways
- Bodily injury (BI) means physical injury, sickness, disease, or death; pure emotional or mental distress without physical harm often falls outside the BI definition.
- Property damage (PD) means physical injury to tangible property (including loss of use) OR loss of use of tangible property not physically injured.
- Personal and advertising injury (Coverage B of the CGL) covers offenses like libel, slander, false arrest, malicious prosecution, wrongful eviction, and copyright infringement in advertising.
- CGL limits stack: a per-occurrence limit caps any single occurrence, while a general aggregate caps total payments for the policy year.
- Auto liability uses split limits (e.g., 100/300/50 = $100k per person BI / $300k per accident BI / $50k PD) or a combined single limit (CSL).
Bodily Injury (BI)
The ISO CGL defines bodily injury as bodily injury, sickness, or disease sustained by a person, including death that results. The exam stresses these points:
- BI requires a physical component. Pure emotional distress or mental anguish without accompanying physical injury frequently falls outside the BI definition (some courts and endorsements expand it).
- BI must be suffered by a person (a third party), consistent with liability being third-party coverage.
Trap: A claim for purely emotional distress, humiliation, or defamation is generally NOT bodily injury. Defamation is handled under Coverage B (personal and advertising injury), not Coverage A.
Property Damage (PD)
The CGL defines property damage two ways:
- Physical injury to tangible property, including resulting loss of use of that property; and
- Loss of use of tangible property that is not physically injured.
Key exam distinctions:
- Tangible property only. The standard CGL treats electronic data as NOT tangible property, so corrupting data is not PD under the unendorsed form.
- Loss of use is covered even with no physical harm — e.g., your negligence blocks access to a neighbor's store, costing them business.
| Scenario | PD? | Why |
|---|---|---|
| You break a customer's window | Yes | Physical injury to tangible property |
| You block a loading dock, halting a tenant's shipments | Yes | Loss of use, no physical injury |
| You erase a client's database (no data endorsement) | No | Electronic data is not tangible property |
A contractor accidentally cuts a fiber line, shutting down a neighboring business for two days though nothing of theirs was physically broken. Does this fit the CGL definition of property damage?
Personal and Advertising Injury (Coverage B)
The CGL's Coverage B responds to a defined list of offenses that are not BI or PD. These are intentional acts in the ordinary sense but covered because they are business torts:
- Personal injury offenses: false arrest/detention/imprisonment; malicious prosecution; wrongful eviction or wrongful entry; oral or written publication that slanders or libels a person/organization or violates privacy.
- Advertising injury offenses: libel/slander in your advertisement; misappropriation of advertising ideas; infringement of copyright, trade dress, or slogan in your advertisement.
Trap: Patent and trademark infringement are generally excluded from Coverage B. Only copyright, trade dress, and slogan infringement "in your advertisement" are covered. Watch for patent/trademark distractor answers.
CGL Limits: Per-Occurrence vs. Aggregate
The CGL stacks several limits. Knowing how they interact is a frequent exam topic.
- Each Occurrence Limit — the most paid for BI and PD from any one occurrence (combined).
- General Aggregate Limit — the most paid for ALL occurrences during the policy year (excludes products-completed operations).
- Products-Completed Operations Aggregate — a separate annual cap for products/completed-work claims.
- Personal & Advertising Injury Limit — caps Coverage B per person/organization.
Worked example: A CGL has a $1,000,000 each-occurrence limit and a $2,000,000 general aggregate. Three unrelated covered occurrences cost $800,000, $900,000, and $700,000. The insurer pays the first two in full ($1.7M), but the third is capped because only $300,000 of aggregate remains. Total paid = $2,000,000; the insured absorbs the extra $400,000.
Auto Liability Limits: Split vs. CSL
Personal and commercial auto liability is commonly written with split limits or a combined single limit (CSL).
Split limits are stated as three numbers, e.g., 100/300/50:
| Figure | Meaning |
|---|---|
| 100 | $100,000 max BI per person |
| 300 | $300,000 max BI per accident (all persons) |
| 50 | $50,000 max property damage per accident |
Worked example (100/300/50): An at-fault driver injures three people ($120k, $90k, $40k = $250k total BI) and causes $60k in PD. The insurer pays: person 1 capped at $100,000 (per-person limit), persons 2 and 3 at $90k and $40k (within limits) — BI total $230,000, under the $300,000 per-accident cap; PD capped at $50,000 of the $60,000. Total paid = $280,000; the insured owes the remaining $20k + $10k = $30,000.
A CSL (e.g., $300,000) provides one shared limit for BI and PD combined, giving more flexibility because there is no per-person sublimit.
Under a 250/500/100 split-limit auto policy, the insured injures one person whose bodily injury damages total $300,000. How much will the BI coverage pay this person?
Comparing Auto Limit Structures
Whether split limits or a CSL serves the insured better depends on how the loss falls.
- A single severe injury is better protected by a CSL or a high per-person split, because split limits cap one person regardless of an unused per-accident figure.
- Multiple smaller injuries can exhaust the per-person caps while leaving per-accident room unused — a CSL pools the money for whoever needs it.
Worked comparison: One claimant has $280,000 in BI. Under 250/500/100 the policy pays only $250,000 (per-person cap); the insured owes $30,000. Under a $300,000 CSL, the policy pays the full $280,000 because there is no per-person sublimit — the entire $300,000 is available to any combination of BI and PD.
Trap: Higher per-accident figures do NOT help a single claimant on split limits — only the first (per-person) number controls one person's recovery.
Where Coverage A and Coverage B Draw the Line
Matching a loss to the correct coverage part is a frequent scenario task. Use the injury type to route it.
| Loss | Coverage | Reason |
|---|---|---|
| Customer slips and breaks a wrist | A (BI) | Physical injury to a person |
| Forklift cracks a client's loading dock | A (PD) | Physical injury to tangible property |
| Your ad falsely disparages a competitor | B (personal & advertising injury) | Defamation in advertising |
| Security guard wrongfully detains a shopper | B (personal injury) | False imprisonment offense |
The each-occurrence limit governs Coverage A, a separate personal & advertising injury limit caps Coverage B per person, and both feed the general aggregate.
Trap: Patent and trademark infringement are NOT Coverage B offenses; only copyright, trade dress, and slogan infringement in your advertisement are covered. Pollution and "your work/your product" are common Coverage A exclusions.