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

Bodily Injury (BI)

Bodily injury (BI) is defined in the ISO CGL (CG 00 01) as bodily injury, sickness, or disease sustained by a person, including death that results. It is strictly physical.

Key points tested:

• Purely emotional distress with no physical manifestation is generally not BI under the standard definition.
• BI includes resulting death - a fatality is paid as a BI claim, not a separate category.
• BI falls under Coverage A of the CGL, alongside property damage.

Property Damage (PD)

Property damage (PD) has two prongs:

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

Exam trap: electronic data is not tangible property under the standard CGL, so corrupting a database is not PD without a special endorsement. A contractor who blocks a client's parking lot causes loss of use (prong 2) even with no physical damage.

Personal and Advertising Injury (Coverage B)

Coverage B - Personal and Advertising Injury covers non-physical offenses arising out of the insured's business. The named offenses include:

• False arrest, detention, or imprisonment
• Malicious prosecution
• Wrongful eviction or invasion of right of private occupancy
• Libel, slander, or disparagement (written/spoken defamation)
• Invasion of privacy
• Copyright/slogan/title infringement in the insured's advertisement

Bold rule: Coverage B has its own limit, separate from Coverage A, and is capped only by the general aggregate.

Coverage C - Medical Payments

Coverage C - Medical Payments pays reasonable medical expenses for bodily injury to others regardless of fault, as a goodwill, no-fault benefit. It applies to injury on the insured's premises or arising from operations, generally within a stated time (commonly one year) of the accident.

Key distinctions tested:

• It does not pay for the insured's own injuries or for an insured's employees (workers' comp territory).
• Limits are small (often $5,000-$10,000 per person) and reduce the chance of a larger Coverage A suit.
• Because it is no-fault, the four elements of negligence are not required for a Coverage C payment.

The tangible-property line and electronic data

The most missed property-damage point is that electronic data is not tangible property under the unendorsed CGL, so corrupting or erasing a customer's database is not property damage - it needs a cyber or electronic-data endorsement. Conversely, loss of use of undamaged tangible property is covered: a contractor who barricades a store's only entrance causes a covered loss-of-use claim even though nothing was physically broken. Keep the two PD prongs straight - physical injury (with resulting loss of use) and pure loss of use of property not physically injured.

Routing a loss to A, B, or C under time pressure

On the exam, classify quickly: physical harm to a person, including death, is Coverage A bodily injury; damage to or loss of use of tangible property is Coverage A property damage; a named non-physical offense (libel, slander, false arrest, wrongful eviction, privacy, slogan/copyright in your advertisement) is Coverage B; and a small goodwill medical bill for an injured non-insured with no lawsuit is Coverage C.

The recurring distractor is advertising injury that did not arise from an advertisement - a design dispute over a product never advertised is not Coverage B - and the reminder that aggregates reset at each renewal, restoring fresh limits.

Classifying a Loss: The Decision Path

On the exam, you must route each loss to the correct CGL coverage part. Work through it in order:

1. Is there physical harm to a person (including death)? Yes -> Bodily Injury, Coverage A.
2. Is tangible property damaged or unusable? Yes -> Property Damage, Coverage A.
3. Is the harm a named non-physical offense (defamation, false arrest, privacy)? Yes -> Coverage B.
4. Is it a goodwill medical bill for an injured non-insured, no lawsuit yet? Yes -> Coverage C.

Exam trap: advertising injury must arise from the insured's advertisement; a copyright dispute over a product design that was never advertised is not Coverage B.

Occurrence vs. Accident and the Aggregate Reset

The CGL defines an occurrence as an accident, including continuous or repeated exposure to substantially the same harmful conditions. This broad wording means slow, ongoing damage (a leaking pipe over months) can be a single occurrence rather than many.

The general aggregate and products-completed operations aggregate are separate annual caps. They reset at each policy renewal, so a new policy year restores fresh aggregate limits.

Bold rule: medical payments (Coverage C) and damages under Coverage A both erode the per-occurrence limit, but Coverage C also has its own per-person sublimit that applies first.

CGL Limit Structure and Worked Example

The CGL declarations list several limits that interact:

Worked example: limits are $1,000,000 each occurrence / $2,000,000 general aggregate. Three covered occurrences cost $700,000, $800,000, and $900,000. Each is under the $1M occurrence cap, but the total claimed is $2.4M. The policy pays only $2,000,000 - the general aggregate - leaving $400,000 unpaid.