10.2 CGL Coverage B: Personal and Advertising Injury, Coverage C: Medical Payments

Coverage B: Personal and Advertising Injury

Where Coverage A requires an occurrence (an accident), Coverage B does not. It responds to specific intentional business torts committed in the course of the insured's business. The CG 00 01 defines "personal and advertising injury" through an enumerated list — if the offense is not on the list, it is not covered.

The seven offenses (the exam loves the count — seven):

1. False arrest, detention, or imprisonment
2. Malicious prosecution
3. Wrongful eviction, wrongful entry, or invasion of right of private occupancy
4. Oral or written publication that slanders or libels a person/organization
5. Oral or written publication that violates a person's right of privacy
6. The use of another's advertising idea in your advertisement
7. Infringing upon another's copyright, trade dress, or slogan in your advertisement

Coverage B Limits and Exclusions

Coverage B uses the Personal and Advertising Injury Limit (typically $1,000,000 per person/organization), and these claims erode the General Aggregate — they do not have a separate aggregate. So a $1,000,000 advertising-injury judgment leaves $1,000,000 of a $2,000,000 General Aggregate for premises and Coverage C claims.

Key Coverage B exclusions tested on the exam:

• Knowing violation — the insured knew the act would violate another's rights.
• Material published with knowledge of falsity — knowingly false statements.
• Material first published before the policy period — pre-existing publications.
• Breach of contract (except certain implied advertising contracts).
• Infringement of patent, trademark, or trade secret — covered only if it arises from advertising as copyright/trade-dress/slogan use; patents are not covered.

Trap: trademark and patent infringement are generally excluded; only copyright, trade dress, and slogan use in your advertisement is covered.

Coverage C: Medical Payments

Coverage C is a small goodwill, no-fault coverage that pays medical expenses for bodily injury caused by an accident on the insured's premises, on ways next to the premises, or because of the insured's operations — regardless of fault. Because it is no-fault, no lawsuit or finding of legal liability is required; the goal is to settle minor injuries quickly and head off larger liability suits.

Medical Payments under the CGL will pay reasonable medical, surgical, dental, and funeral expenses incurred within one year of the accident date. The Medical Expense Limit is typically $5,000 or $10,000 per person, and it is part of — and reduces — the Each Occurrence limit and the General Aggregate.

Who Coverage C Will NOT Pay

Med Pay is for third parties, not the business itself. Coverage C does not pay medical expenses for:

• Any insured (the named insured, partners, employees) — except certain volunteer workers.
• A person hired by or who normally works for the insured (employees — these go to Workers Compensation).
• A tenant injured on rented premises, or an injury for which the insured has assumed liability under a contract.
• Injury arising out of the products-completed operations hazard — Med Pay only covers premises and operations, not finished products.
• Injury during athletics/sports activities the insured sponsors.

Exam trap: if an employee is hurt on the job, Coverage C does not respond — that is a Workers Compensation claim. Med Pay is for customers and visitors, not staff.

Worked Limit Interaction (B and C eroding the Aggregate)

Limits: Each Occurrence $1,000,000; General Aggregate $2,000,000; Personal & Adv Injury $1,000,000; Med Pay $10,000.

During the year:

1. A libel judgment (Coverage B) pays $1,000,000 — this erodes the General Aggregate to $1,000,000 remaining.
2. A visitor slips and the insurer pays Coverage C Med Pay of $8,000 — this further reduces the General Aggregate to $992,000 and counts toward the Each Occurrence limit.
3. A premises bodily-injury judgment (Coverage A) of $1,200,000 can now draw only $992,000 from the remaining General Aggregate, even though the Each Occurrence limit is $1,000,000.

Lesson for the exam: B and C share the General Aggregate with premises-ops Coverage A. Only products-completed operations enjoys its own separate aggregate.

"Advertisement" Is Defined Narrowly

Because two of the seven offenses hinge on the word advertisement, the CGL defines it: a notice broadcast or published to the general public or specific market segments about the insured's goods, products, or services, for the purpose of attracting customers. Internet websites count only to the extent they contain advertising material — the parts of a site that are merely informational are not an advertisement.

This definition narrows Coverage B sharply. A one-on-one sales email is generally not an advertisement; a mass marketing campaign is. The exam will give a fact pattern where a defamatory remark is made in a private negotiation (not covered as advertising injury, though it may be covered as the separate publication that libels offense) versus a published ad campaign (covered). Read carefully whether the offense alleged is one of the two advertising offenses or one of the five personal injury offenses, because the advertisement definition applies only to the advertising ones.

Coverage C in Practice: Speed Over Fault

Coverage C exists to defuse small claims before they become liability suits. Because it is no-fault, the adjuster can pay a customer's $1,200 emergency-room bill immediately without any admission of negligence, often preventing a much larger Coverage A demand. Payment under Coverage C is not an admission of liability.

Remember the structural limits that the exam combines with the dollar figures:

If the same accident later produces a Coverage A judgment, any Med Pay already paid reduces the Each Occurrence limit available for that judgment.