10.2 CGL Coverage B: Personal and Advertising Injury, Coverage C: Medical Payments
Key Takeaways
- Coverage B pays damages because of personal and advertising injury arising out of the insured's business, including offenses such as false arrest, malicious prosecution, libel, slander, wrongful eviction, and copyright/slogan infringement in advertising.
- Coverage B is offense-triggered (not occurrence-triggered), and it shares the General Aggregate but has its own Personal and Advertising Injury Limit per person or organization.
- Coverage C - Medical Payments pays reasonable medical expenses regardless of fault for bodily injury on the insured's premises or arising from operations, typically up to $5,000 per person.
- Coverage C is goodwill, no-fault coverage; it does not require the insured to be legally liable, but excludes injury to the insured, employees, tenants, and injury from products or completed operations.
- Coverage C payments fall within the Each Occurrence Limit shared with Coverage A, so a large BI judgment plus med pay cannot exceed the per-occurrence cap.
Coverage B - Personal and Advertising Injury
Coverage B is the second insuring agreement of CG 00 01. It pays sums the insured is legally obligated to pay as damages because of personal and advertising injury caused by an offense arising out of the insured's business. Like Coverage A, the insurer has a duty to defend.
The critical contrast: Coverage A is triggered by an occurrence (an accident causing BI/PD); Coverage B is triggered by an enumerated offense, not an accident. There is no requirement of bodily injury or physical property damage.
The Seven Covered Offenses
ISO lists the offenses that constitute personal and advertising injury. Memorize the categories:
| Offense | Example |
|---|---|
| False arrest / detention / imprisonment | Detaining a suspected shoplifter without cause |
| Malicious prosecution | Wrongfully pressing charges |
| Wrongful eviction / entry / invasion of privacy of a room or premises | Landlord locking out a tenant |
| Oral or written publication that slanders or libels | A business defaming a competitor |
| Oral or written publication that violates privacy | Publishing private facts |
| Use of another's advertising idea in your advertisement | Copying a rival's ad concept |
| Infringing on copyright, trade dress, or slogan in your advertisement | Using a protected slogan |
Slander is spoken defamation; libel is written/published defamation - a frequent vocabulary trap.
Coverage B Limits and Key Exclusions
The Personal & Advertising Injury Limit is the most the insurer pays for all such injury sustained by any one person or organization. Coverage B payments erode the shared General Aggregate but are separate from the Each Occurrence Limit.
Major Coverage B exclusions:
- Injury caused by the insured with knowledge of its falsity (knowingly publishing false material).
- Material published before the policy period began.
- Criminal acts committed by the insured.
- Breach of contract (except misappropriation of advertising ideas under contract).
- Failure of goods to conform to advertised quality (a quality/performance dispute, not an injury offense).
- Infringement of patent or trademark (only copyright, trade dress, and slogan in advertising are covered).
Coverage C - Medical Payments
Coverage C pays reasonable medical expenses for bodily injury caused by an accident on premises the insured owns or rents, on ways next to those premises, or because of the insured's operations. The hallmark feature: payment is made regardless of fault (no-fault goodwill coverage). The insured need not be legally liable.
Med pay covers first aid at the time of accident, necessary medical/surgical/dental services, and funeral expenses - but only if the expense is incurred and reported within one year of the accident date. The standard Medical Expense Limit is $5,000 per person.
Coverage C Exclusions and Limit Interaction
Coverage C does not apply to:
- Bodily injury to the named insured, partners, or employees (employees fall under WC).
- Injury to a tenant of the insured (occupies part of the premises).
- Injury arising out of products-completed operations.
- Injury from war, or to anyone taking part in athletics.
- Persons whose injury is excluded under Coverage A.
Limit interaction (worked example): A visitor falls in a store and the CGL has a $1,000,000 Each Occurrence limit and $5,000 Med Pay. The insurer pays $5,000 med pay with no liability finding. If a liability suit then yields a $1,000,000 BI judgment from the same occurrence, total Coverage A + C cannot exceed the $1,000,000 each-occurrence cap - so the prior $5,000 reduces what remains. Med pay is the inexpensive way to settle minor injuries before they become lawsuits.
Quick Comparison
| Feature | Coverage A | Coverage B | Coverage C |
|---|---|---|---|
| Trigger | Occurrence (accident) | Offense | Accident on premises/operations |
| Fault required? | Yes (legally liable) | Yes (legally liable) | No (no-fault) |
| Injury type | BI / PD | Personal & advertising injury | Medical expense for BI |
| Limit | Each Occurrence | P&A Injury Limit | Medical Expense (per person) |
| Aggregate | General + Products | General | Within Each Occurrence |
| Duty to defend | Yes | Yes | No (it just pays expenses) |
Why the Offense Trigger Matters
Because Coverage B responds to offenses rather than accidents, the timing question shifts. The offense must be committed in the coverage territory during the policy period. A libelous statement first published before the policy began (and merely continuing) is excluded. This is why an insured switching carriers must watch for prior-publication gaps.
Coverage B is also where small businesses face surprising exposure: a slogan copied into a flyer, a privacy violation in a mailing list, or a wrongful eviction by a landlord-insured. Patent and trademark infringement, however, are not covered - only copyright, trade dress, and slogan offenses committed in the insured's advertisement fall within the grant. Distinguishing these intellectual-property lines is a common exam point.
A retailer's employee writes a blog post falsely accusing a competitor of fraud, harming that competitor's reputation. Which CGL coverage and offense applies?
Med Pay as a Loss-Control Tool
Underwriters view Coverage C as cheap loss control. By paying small medical bills promptly and without an admission of fault, the insurer often prevents a minor incident from escalating into a Coverage A liability suit. Because the typical limit is only $5,000 per person, the exposure is modest, and many insureds keep it.
The one-year reporting window is strict: medical expenses must be incurred (and reported) within one year of the accident date, even if treatment continues. Also remember the limit operates per person, so a single occurrence injuring three guests could pay up to $5,000 each - subject always to the shared Each Occurrence Limit with Coverage A. On the exam, watch for fact patterns that try to apply med pay to an employee (excluded - WC) or to a products-completed operations injury (excluded).
A customer slips in a store. The owner is clearly not at fault, but the CGL still pays the customer's $1,200 emergency room bill. Which coverage responds and why?