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

The Three Liability Offenses Defined

The ISO Commercial General Liability Occurrence form (CG 00 01) is built around two main insuring agreements. Coverage A insures bodily injury and property damage; Coverage B insures personal and advertising injury; Coverage C is medical payments (a no-fault first-party add-on). Each defined term is tested for its exact boundaries.

Bodily Injury (BI)

Bodily injury means bodily injury, sickness, or disease sustained by a person, including death resulting from any of these at any time. Note what the standard CGL definition does not include: purely emotional distress or mental anguish unaccompanied by physical injury is generally outside the BI definition (states vary, and some forms add it).

Trap: Death is part of BI, not a separate coverage. Mental anguish standing alone is usually NOT bodily injury under the unendorsed CGL.

Property Damage (PD)

Property damage has two prongs:

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

The definition expressly notes that electronic data is not tangible property in the standard form. Pure economic loss (lost profits without physical damage) is generally not PD.

Trap: "Tangible" is the keyword. Damage to data, software, or purely financial harm is excluded from PD unless a specific endorsement adds it.

Personal and Advertising Injury (Coverage B)

Coverage B picks up specific offenses — many of which are intentional torts excluded under Coverage A. The CGL lists seven enumerated offenses:

• False arrest, detention, or imprisonment
• Malicious prosecution
• Wrongful eviction, wrongful entry, or invasion of the right of private occupancy
• Oral or written publication that slanders or libels (defamation)
• Publication that violates a person's right of privacy
• Use of another's advertising idea in your advertisement
• Infringing on another's copyright, trade dress, or slogan in your advertisement

Trap: Coverage B is triggered by an offense, not an occurrence — so there is no "accident" requirement. But it still excludes injury the insured knew was false or committed with knowledge of falsity.

CGL Limits Structure

The occurrence CGL stacks several limits. The exam expects you to know how they interact:

Worked Example

A contractor's CGL has an Each Occurrence Limit of $1,000,000 and a General Aggregate of $2,000,000. Three separate covered occurrences during the year produce judgments of $700,000, $800,000, and $900,000 (total $2.4M). Each is below the $1M per-occurrence cap, but once the insurer has paid $2,000,000, the General Aggregate is exhausted — the insured pays the remaining $400,000 out of pocket.

Medical Payments (Coverage C)

Coverage C — Medical Payments is a small no-fault benefit that pays reasonable medical expenses for bodily injury caused by an accident on the insured's premises or arising from its operations, regardless of whether the insured is liable. Limits are modest (commonly $5,000 or $10,000 per person), and expenses must be incurred within a stated period (often one year). Its purpose is goodwill — paying minor injuries quickly to head off larger liability suits. Payments under Coverage C reduce the each-occurrence limit available under Coverage A for the same occurrence.

Key Coverage A Exclusions to Recognize

The occurrence CGL excludes several exposures candidates must spot: expected or intended injury, contractual liability (except insured contracts), liquor liability for those in the business, workers compensation/employer's liability (covered elsewhere), pollution, auto/aircraft/watercraft, damage to the insured's own product or work, and the damage-to-property (care, custody, or control) exclusions. The fire-damage carve-back — Damage to Premises Rented to You — restores limited coverage for fire (and certain perils) to premises the insured rents, typically up to a $100,000 sub-limit.

Defining the Three Categories of Covered Injury

Liability policies pay for three defined categories of harm, and the exam tests the precise boundaries. Bodily injury (BI) means physical injury, sickness, or disease sustained by a person, including death that results. It does not, in the standard definition, include purely emotional or mental distress unless it flows from a physical injury, a distinction courts and exam writers probe.

Property damage (PD) means physical injury to tangible property, including resulting loss of use, or loss of use of tangible property that is not physically injured. Notably, electronic data is generally not tangible property, which is why a data breach does not trigger PD coverage and instead drives the purchase of cyber liability.

Personal and advertising injury is a separate, defined group of non-bodily, offense-based harms: false arrest or detention, malicious prosecution, wrongful eviction or invasion of a right of private occupancy, oral or written publication that slanders or libels a person or organization, publication that violates a person's right of privacy, the use of another's advertising idea, and infringement of copyright, trade dress, or slogan in the insured's advertisement. Unlike BI and PD, these are intentional offenses the policy nonetheless covers, which is why they sit in their own coverage with their own limit.

The difference between an occurrence (an accident, including continuous or repeated exposure to substantially the same harmful conditions) and an intentional offense matters because BI and PD require an accidental occurrence, while personal and advertising injury covers deliberate offenses. Identifying which category a loss falls into determines which coverage and limit respond.

Worked scenario: a business posts a competitor-bashing advertisement that falsely accuses the rival of fraud, and the rival sues for defamation. There is no bodily injury or property damage, so Coverage A does not respond, but the false statement is a personal and advertising injury offense (libel in an advertisement), so that coverage responds subject to its own limit and exclusions. Sorting a loss into bodily injury, property damage, or personal and advertising injury is the core liability-definitions skill.

Key Takeaways

Liability coverage pays for bodily injury (physical harm, sickness, disease, death), property damage (physical injury to or loss of use of tangible property, excluding electronic data), and personal and advertising injury (defined offenses such as false arrest, libel, slander, privacy violation, and advertising-idea or copyright infringement). BI and PD require an accidental occurrence, while personal and advertising injury covers intentional offenses, each with its own coverage and limit.