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

Coverage B: Personal and Advertising Injury Liability

Whereas Coverage A responds to physical harm caused by an occurrence, Coverage B responds to specified intangible offenses. Coverage B does not require an occurrence or accident; it is triggered when the insured commits one of the enumerated offenses during the policy period in the course of the named insured's business. The same ISO CGL form (CG 00 01) contains Coverage B.

The defined offenses (memorize these for the exam) are:

• False arrest, detention, or imprisonment
• Malicious prosecution
• Wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room or premises
• Oral or written publication of material that slanders or libels a person or organization
• Oral or written publication of material that violates a person's right of privacy
• Use of another's advertising idea in your advertisement
• Infringing upon another's copyright, trade dress, or slogan in your advertisement

Coverage B Exclusions and Traps

Classic exam traps: Coverage B excludes injury caused by the insured with knowledge of its falsity, injury arising from a breach of contract, and injury from patent or trademark infringement (only copyright, trade dress, and slogan in advertising are covered). Material first published before the policy period is also excluded.

Coverage B has its own limit, the Personal and Advertising Injury Limit, which is a per-person/organization sublimit and is itself subject to the General Aggregate (not the Products-Completed Operations Aggregate).

Coverage C: Medical Payments

Coverage C (Medical Payments) is a goodwill, no-fault coverage. It pays reasonable medical expenses for bodily injury caused by an accident on premises the insured owns or rents, or because of the insured's operations, regardless of fault. There is no need to prove the insured was legally liable - this distinguishes it from Coverage A.

Key limitations:

• Expenses must be incurred and reported within a stated time, typically the accident must occur during the policy period and medical expenses must be incurred within one year (3 years in some editions) of the accident date.
• It does not apply to the named insured, employees injured in the course of employment (workers comp territory), tenants, or athletic-event participants.
• Coverage C is subject to the Each Occurrence Limit of Coverage A, and has its own Medical Expense Limit (commonly $5,000 or $10,000 per person).

Worked Example: Coverage C Within the Occurrence Limit

A customer slips in a store. The CGL shows a $1,000,000 Each Occurrence Limit and a $10,000 Medical Expense (any one person) Limit. The store voluntarily pays the customer's $7,000 in medical bills under Coverage C without any lawsuit. Later the customer sues and recovers $300,000 under Coverage A for the same occurrence. The total paid is $7,000 + $300,000 = $307,000, all of which is counted against the single $1,000,000 Each Occurrence Limit because Coverage C payments share that limit.

Coverage B vs. Coverage A: Offense vs. Occurrence

Coverage B (Personal and Advertising Injury) responds to enumerated offenses rather than accidental bodily injury. The seven offenses are false arrest/detention, malicious prosecution, wrongful eviction/invasion of private occupancy, oral or written defamation, violation of privacy, misappropriation of advertising ideas, and copyright/trade-dress/slogan infringement in an advertisement. Patent and trademark infringement are excluded.

Coverage B shares the General Aggregate but has its own Personal & Advertising Injury limit per person/organization. Unlike Coverage A, there is no 'occurrence' requirement — the trigger is committing a listed offense in the course of business.

Coverage C Medical Payments Mechanics

Coverage C pays reasonable medical expenses for bodily injury to a non-insured caused by an accident on the insured's premises or arising from its operations, regardless of fault and without a lawsuit, if expenses are incurred within (typically) one year of the accident. It is a goodwill, fault-free coverage that can prevent small injuries from escalating into liability suits. Payments are subject to the Medical Expense limit (often $5,000–$10,000 per person) and reduce the Each Occurrence limit. Med pay does not apply to the insured, employees injured on the job (workers comp), or tenants of the insured.

Coverage B Exclusions and Traps

Coverage B does not apply to: injury caused by the insured with knowledge of its falsity (knowing-falsehood); material first published before the policy period (prior-publication); injury arising from breach of contract (except implied warranty of fitness in an advertisement); wrong description of price of goods; and the insured's own infringement of patent or trademark. Because Coverage B turns on enumerated offenses, the exam often offers a tempting 'trademark infringement' or 'patent' answer — both are excluded. Only copyright, trade dress, and slogan infringement in the insured's advertisement qualify.

Worked Example: Coverage C Within the Occurrence Limit

A customer slips in the insured's store and incurs $6,000 in medical bills within the year. The CGL Medical Expense limit is $10,000 per person. Coverage C pays the $6,000 with no need to prove the store was negligent and no lawsuit, reducing the Each Occurrence limit available for any later Coverage A liability claim arising from the same occurrence. If the customer later sues for $200,000 alleging negligence, that suit shifts to Coverage A, where fault and the full occurrence limit (less amounts already paid) apply.