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

Bodily Injury (BI)

Under the ISO CGL CG 00 01, bodily injury means physical injury, sickness, or disease sustained by a person, including death that results from any of these. The hallmark is a physical harm to a person.

• A broken arm, a burn, a heart attack, and a death are all BI.
• Pure emotional distress or mental anguish with no accompanying physical injury generally does not meet the standard CGL definition (some courts and endorsements vary).

Trap: Watch for questions describing only humiliation, fright, or mental anguish with no physical harm — under the unamended CGL definition, that is typically NOT bodily injury.

Property Damage (PD)

Property damage under the CGL has two prongs:

1. Physical injury to tangible property, including all resulting loss of use of that property; and
2. Loss of use of tangible property that is not physically injured.

The second prong is key: you can owe PD even when nothing is broken. If a contractor blocks access to a store for a week, the store's loss of use is covered PD even though the building is undamaged.

Trap: The CGL defines property as tangible. Electronic data is not tangible property under the standard form, so corrupting a customer's data is generally not 'property damage' — a frequent exam point.

Coverage A vs. Coverage B

The CGL contains separate insuring agreements:

Personal and Advertising Injury (Coverage B) covers seven enumerated offenses:

1. False arrest, detention, or imprisonment
2. Malicious prosecution
3. Wrongful eviction or invasion of privacy of a room/dwelling the person occupies
4. Oral or written publication that slanders or libels a person or organization
5. Oral or written publication that violates a person's right of privacy
6. Use of another's advertising idea in your advertisement
7. Infringing on another's copyright, trade dress, or slogan in your advertisement

Trap: Coverage B does NOT require bodily injury. A libel suit triggers Coverage B even though no one was physically hurt.

CGL Limits and How They Stack

The CGL declarations show several limits that interact:

• Each Occurrence Limit — most paid for all BI/PD from a single occurrence.
• General Aggregate Limit — most paid for ALL Coverage A (other than products-completed operations), Coverage B, and Coverage C combined during the policy year.
• Products-Completed Operations Aggregate — a SEPARATE annual cap for injury from the insured's products or completed work.
• Personal & Advertising Injury Limit — per person/organization cap for Coverage B.

Worked Example — Aggregate Erosion

A CGL has a $1,000,000 Each Occurrence limit and a $2,000,000 General Aggregate. During the year:

• Claim 1 pays $900,000
• Claim 2 pays $800,000
• Claim 3 is a covered $600,000 loss.

Total of Claims 1 and 2 = $1,700,000, leaving only $300,000 of the $2,000,000 aggregate. Even though Claim 3 is under the $1,000,000 occurrence limit, the insurer pays only the remaining $300,000 — the aggregate is exhausted and the insured owes the $300,000 shortfall.

Coverage C — Medical Payments

The CGL also includes Coverage C, Medical Payments, a small no-fault benefit (commonly $5,000 per person) that pays a third party's reasonable medical expenses regardless of fault. Its purpose is goodwill — paying minor injuries quickly to avoid a larger suit. Amounts paid reduce any later Coverage A judgment.

Trap: Coverage C does NOT require negligence — it is no-fault. But it excludes injury to the insured, employees in the course of employment (workers' comp), and tenants of the insured's property.

Defined Terms That Decide Coverage

Several CGL definitions are frequent exam targets because they quietly limit coverage:

• Occurrence — 'an accident, including continuous or repeated exposure to substantially the same general harmful conditions.' Damage must be neither expected nor intended by the insured.
• Your product and your work — trigger the products-completed operations hazard and feed the separate aggregate.
• Impaired property — tangible property that cannot be used because the insured's work is defective; the 'business risk' exclusions remove faulty workmanship from coverage.
• Personal and advertising injury — defined by the seven offenses, with its own per-person limit subject to the general aggregate.

How the Limits Interact

Picture a CGL with $1M Each Occurrence / $2M General Aggregate / $2M Products-Completed Operations Aggregate. A products claim erodes only the products aggregate, preserving the general aggregate for premises/operations and Coverage B losses, which share the general aggregate.

Trap: Products-completed operations losses do NOT erode the general aggregate — they have a separate annual cap. Mixing the two aggregates is a classic wrong answer.

Aggregate Reinstatement and Sublimits

Unlike many property policies, the CGL aggregate does not automatically reinstate after a loss — once the general aggregate is exhausted, no further Coverage A (non-products), B, or C losses are paid for the rest of the term unless an endorsement says otherwise.

Key limit relationships to memorize:

• The Each Occurrence limit caps any single occurrence (combined BI + PD).
• The General Aggregate caps annual premises/operations BI/PD, Personal & Advertising Injury, and Medical Payments.
• Personal & Advertising Injury is a per-person sublimit within the general aggregate.

Trap: Because Personal & Advertising Injury and Medical Payments draw down the SAME general aggregate, a heavy libel year leaves less for ordinary BI/PD claims.