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

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:

1. Physical injury to tangible property, including resulting loss of use of that property; and
2. 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.

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:

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.

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.

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.