10.2 CGL Coverage B: Personal and Advertising Injury, Coverage C: Medical Payments
Key Takeaways
- Coverage B insures seven enumerated personal and advertising injury offenses; patent and trademark infringement are NOT covered.
- Coverage B has its own per-person/organization limit but still erodes the General Aggregate.
- Coverage C pays reasonable medical expenses on a no-fault basis up to a small per-person limit, with expenses incurred and reported within one year.
- Coverage C excludes employees (workers' comp lane), tenants, athletes, hired workers, and products-completed operations injuries.
Coverage B: Personal and Advertising Injury
Coverage B insures liability for personal and advertising injury caused by an enumerated offense committed in the course of the insured's business. Unlike Coverage A, the trigger is the commission of a listed offense, not bodily injury or property damage from an occurrence. The CG 00 01 lists exactly seven offenses:
- False arrest, detention, or imprisonment;
- Malicious prosecution;
- Wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room/dwelling/premises a person occupies;
- Oral or written publication that slanders or libels a person or organization, or disparages goods, products, or services;
- Oral or written publication that violates a person's right of privacy;
- The use of another's advertising idea in your advertisement; and
- Infringing on copyright, trade dress, or slogan in your advertisement.
Note that patent and trademark infringement are not covered offenses (a frequent trap), and the publication must be one the insured did not know to be false.
Coverage B Limits and Common Traps
Coverage B is subject to its own Personal and Advertising Injury Limit (commonly $1,000,000), which is the most the insurer pays for all such injury sustained by any one person or organization. Coverage B payments also erode the General Aggregate Limit, so a large defamation suit can reduce the funds available for Coverage A claims later in the term.
Key exclusions under Coverage B:
- Injury caused by the insured with knowledge of its falsity;
- Injury arising from an oral or written statement first published before the policy period;
- Breach of contract, except an implied contract to use another's advertising idea;
- Statements about the insured's own goods that are knowingly false; and
- Injury arising out of the insured's business of advertising, broadcasting, publishing, or telecasting (these need a media liability policy).
Coverage C: Medical Payments
Coverage C pays reasonable medical expenses for bodily injury caused by an accident on premises the insured owns or rents, on ways next to those premises, or because of the insured's operations — regardless of fault. This is the critical contrast with Coverage A:
| Feature | Coverage A | Coverage C |
|---|---|---|
| Trigger | Legal liability (fault) | No-fault, goodwill payment |
| What it pays | Damages (BI/PD) | Medical expenses only |
| Typical limit | $1,000,000 each occurrence | $5,000 – $10,000 per person |
| Reporting window | Standard claim conditions | Expenses incurred within 1 year |
Coverage C is a small, no-fault goodwill payment designed to settle minor injuries quickly and discourage lawsuits. Medical expenses must be incurred and reported within one year of the accident date. Coverage C is subject to a separate Medical Expense Limit per person and also erodes the General Aggregate.
Who Is Excluded From Coverage C
Coverage C does not pay medical expenses for several categories of persons. Memorize these excluded claimants:
- Any insured (other than a volunteer worker injured in the scope of duties is itself not covered as a claimant);
- A person hired to do work for the insured (a tenant of any insured);
- A person injured on that part of premises the insured owns or rents that the person normally occupies;
- An employee of any insured injured in the course of employment (this is the workers' compensation lane);
- A person injured while taking part in athletics; and
- Injury included within the products-completed operations hazard.
Worked example: A customer slips in a store aisle and incurs $3,500 in medical bills, reported two months later. With a $5,000 Coverage C limit, the insurer pays the full $3,500 as a no-fault goodwill payment — no proof of the store's negligence is required.
A competitor sues an insured advertiser, alleging the insured used the competitor's slogan and infringed its patent in an ad. Which claim is covered under CGL Coverage B?
An employee is injured in the course of employment and seeks medical expenses under CGL Coverage C. How does the policy respond?
Coverage B: Personal and Advertising Injury Offenses
Coverage B responds to enumerated offenses rather than accidents: false arrest, detention, or imprisonment; malicious prosecution; wrongful eviction or wrongful entry or invasion of the right of private occupancy; oral or written publication that libels, slanders, or disparages; oral or written publication that violates a person's right of privacy; the use of another's advertising idea in the insured's advertisement; and infringement of copyright, trade dress, or slogan in the insured's advertisement. Because these are offense-based, the trigger is committing the offense during the policy period, and the insurer also defends Coverage B suits.
Coverage B Limits and Common Traps
Coverage B is subject to a Personal and Advertising Injury limit that applies per person or organization and erodes the general aggregate. Key exclusions remove coverage for offenses committed with knowledge of falsity, material published before the policy period, criminal acts, contractual assumption of liability, breach of contract (other than misappropriation of advertising ideas under an implied contract), and the insured's failure to conform goods to advertised quality. The exam often disguises an ordinary breach-of-contract dispute as advertising injury; recognizing that pure breach of contract is excluded prevents the wrong answer.
Coverage C: Medical Payments
Coverage C pays reasonable medical expenses for bodily injury caused by an accident on premises the insured owns or rents, on ways next to those premises, or because of the insured's operations, regardless of fault, if the expense is incurred and reported within a stated time (often one year) and the injured person submits to examination. Like homeowners medical payments, it is goodwill coverage meant to settle minor third-party injuries quickly without a liability determination, with a modest per-person limit.
Who Is Excluded From Coverage C
Coverage C does not pay for injuries to the named insured, the insured's employees (workers compensation responds instead), tenants, persons injured while taking part in athletics, persons injured by products or completed operations, or injuries otherwise excluded under Coverage A. The exclusion of employees and of products/completed-operations injuries is frequently tested, because candidates assume medical payments cover everyone hurt near the business. When a scenario describes an injured employee or a customer hurt by the insured's product, Coverage C does not respond; the workers compensation policy or Coverage A products exposure does.