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

Coverage A: Bodily Injury and Property Damage

The ISO CGL CG 00 01 04 13 Coverage A insures bodily injury and property damage that an insured becomes legally obligated to pay, when caused by an occurrence (an accident, including continuous or repeated exposure to substantially the same harmful conditions).

• Bodily injury (BI) — 'bodily injury, sickness, or disease sustained by a person, including death resulting from any of these at any time.' Note: standard BI excludes pure mental anguish unless it stems from physical injury.
• Property damage (PD) — (a) physical injury to tangible property, including loss of use of that property; or (b) loss of use of tangible property that is not physically injured.

Trap: under the standard form, electronic data is not tangible property, so corrupting a customer's data is not 'property damage' absent an endorsement.

Coverage B: Personal and Advertising Injury

Coverage B is offense-based, not occurrence-based. It pays for injury arising out of a list of named offenses, regardless of whether an accident occurred:

Because Coverage B responds to specific intentional-sounding offenses, it is a deliberate exception to the usual exclusion of intentional torts. It carries its own separate limit and is not reduced by the each-occurrence (Coverage A) limit until the aggregate is reached.

The CGL Limit Structure

The CGL declarations stack several limits. Suppose a small contractor's CGL shows:

• Each Occurrence Limit: $1,000,000
• Personal & Advertising Injury Limit: $1,000,000 (any one person/organization)
• General Aggregate Limit: $2,000,000
• Products-Completed Operations Aggregate: $2,000,000

How the limits cap a loss

1. A single BI claim is capped at the $1,000,000 each-occurrence limit.
2. All Coverage A + B losses (other than products-completed operations) draw down the $2,000,000 general aggregate; once exhausted, no further payment that policy period.
3. Products-completed operations claims draw against their own $2,000,000 aggregate — a separate bucket.

Worked example: Three separate covered occurrences in one year cost $900,000, $800,000, and $700,000 = $2,400,000. Each is within the $1,000,000 per-occurrence limit, but the $2,000,000 general aggregate caps total payment at $2,000,000 — the insured absorbs the final $400,000.

BI vs. PD vs. Personal/Advertising Injury — Don't Confuse Them

• Bodily injury = harm to a person (physical) → Coverage A.
• Property damage = harm to tangible property or its loss of use → Coverage A.
• Personal & advertising injury = harm from a named offense (reputation, privacy, advertising) → Coverage B.

A libel lawsuit is not bodily injury even though it harms a person — it is a personal injury offense under Coverage B. A defamation claim that also alleges physical illness from stress could implicate both, but the exam tests the default classification: reputational/privacy/advertising harm = Coverage B.

Defining Bodily Injury and Property Damage

Liability policies draw sharp definitional lines the exam tests constantly. Bodily injury means physical injury, sickness, or disease, including death resulting from it; purely emotional distress without physical manifestation may fall outside it unless the policy broadens the term. Property damage means physical injury to tangible property, including loss of use, or loss of use of tangible property that is not physically injured. Note that data and purely economic loss are generally not tangible property, which is why cyber and financial losses often require specialty coverage rather than the standard liability grant.

Personal and Advertising Injury Offenses

Personal and advertising injury is a separate, offense-based grant covering specifically enumerated wrongs rather than accidental physical harm: false arrest or imprisonment, malicious prosecution, wrongful eviction or invasion of the right of private occupancy, oral or written publication that slanders or libels or disparages, oral or written publication that violates privacy, use of another's advertising idea, and infringement of copyright, trade dress, or slogan in an advertisement.

Because these are intentional-type offenses, they are covered under a separate insuring agreement with its own conditions and exclusions, not under the bodily-injury grant.

Distinguishing the Three on the Exam

The exam routinely forces a choice among bodily injury, property damage, and personal/advertising injury. A customer who slips and breaks an arm is bodily injury. A forklift that crushes a neighbor's fence is property damage, including the loss of use while it is repaired. A business that publishes an ad disparaging a competitor or that wrongfully evicts a tenant commits a personal/advertising injury offense. Sorting the facts into the correct category determines which insuring agreement and which limit respond, so read for whether the harm is physical, to property, or an enumerated offense.

How the Limit Structure Caps These Losses

In the CGL these definitions feed into a layered limit structure: a per-occurrence limit caps each bodily-injury/property-damage occurrence, a general aggregate caps the policy-period total for those plus personal/advertising injury, a separate products-completed-operations aggregate caps that exposure, and a personal-and-advertising-injury limit caps offenses per person or organization.

Understanding which definition routes a loss to which limit is essential, because a personal-injury offense erodes the general aggregate but not the products aggregate, and a products loss erodes only the products aggregate. The exam tests both the definition and the limit it consumes.