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

Coverage B: Personal and Advertising Injury Liability

Coverage B is offense-based, not accident-based. It pays damages the insured becomes legally obligated to pay because of personal and advertising injury caused by an offense arising out of the insured's business. Unlike Coverage A, there is no requirement of an 'occurrence' or of bodily injury - the trigger is committing one of the listed offenses during the policy period.

The CGL combines two older coverages: personal injury (a defined liability term meaning injury to a person's rights or reputation, distinct from bodily injury) and advertising injury. The defined offenses are:

• False arrest, detention, or imprisonment
• Malicious prosecution
• Wrongful eviction, wrongful entry, or invasion of the right of private occupancy of a room/dwelling/premises the person occupies
• Oral or written publication of material that slanders or libels a person/organization or disparages goods, products, or services
• Oral or written publication of material that violates a person's right of privacy
• The use of another's advertising idea in the insured's advertisement
• Infringing upon another's copyright, trade dress, or slogan in the insured's advertisement

Coverage B limits and exclusions

Coverage B has its own Personal and Advertising Injury Limit shown on the declarations - the most paid for all such injury sustained by any one person or organization. Crucially, Coverage B payments erode the General Aggregate, just like ongoing-operations Coverage A losses. So Coverage A and Coverage B together cannot exceed the General Aggregate in a policy year.

Key Coverage B exclusions limit it to legitimate, non-deliberate marketing and tenancy disputes:

• Knowing violation of the rights of another (intentional offenses are excluded).
• Material published with knowledge of its falsity (you cannot lie on purpose and collect).
• Material published before the policy period began.
• Criminal acts, contractual liability assumed (with limited exceptions), and breach of contract other than misappropriation of advertising ideas under an implied contract.
• Offenses arising out of the failure of goods to conform to advertised quality, wrong description of prices, or the insured's business being in media/advertising/internet (those need a specialized form).

Trap: Coverage B does NOT cover patent infringement and generally not trademark infringement except as 'slogan' or 'trade dress' in the insured's own advertisement.

Another heavily tested distinction is the difference between Coverage A's 'occurrence' trigger and Coverage B's 'offense' trigger. Coverage A asks whether an accident caused physical injury or damage during the policy period. Coverage B asks whether the insured committed one of the listed offenses during the period. A defamatory statement is an offense, not an accident, so it lands in Coverage B even though no one is physically hurt. This is why a business that never has a bodily-injury claim can still have a large Coverage B loss from a single advertising or defamation suit.

Coverage C: Medical Payments

Coverage C is a no-fault, good-will coverage. It 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 - regardless of fault and without the need for a lawsuit. Its goal is to settle small injuries quickly to avoid larger liability claims.

Coverage C is subject to a Medical Expense Limit per person (commonly $5,000, sometimes $10,000). Important conditions and limits:

• The expense must be incurred and reported within one year of the date of the accident.
• Payment is also subject to the Each Occurrence limit - Coverage A damages plus Coverage C med pay for one occurrence cannot exceed the Each Occurrence limit.
• Coverage C erodes the General Aggregate as well.

Who Coverage C will NOT pay

Medical Payments excludes several classes of people so that other coverages or policies apply:

• Any insured (except volunteer workers).
• A person hired to do work for the insured or a tenant of the insured.
• A person injured on that part of the premises the person normally occupies.
• A person eligible for workers' compensation or disability benefits (their work injuries go to the WC policy).
• Injury arising out of products-completed operations or excluded under Coverage A.

Worked example: A customer slips in a store and incurs $3,200 in ER bills. The store pays the bill under Coverage C med pay (within the $5,000 limit) with no admission of fault, hoping to head off a larger Coverage A liability suit. If the customer later sues and wins $40,000 in damages, that judgment is paid under Coverage A, and the $3,200 already paid is credited against the Each Occurrence limit because both coverages share it.

A second worked example shows the limit interaction clearly. Suppose Each Occurrence is $1,000,000 and Coverage C med pay is $5,000 per person. Two people are hurt in one accident; the insurer pays $5,000 med pay to each ($10,000 total) and later $600,000 in Coverage A damages for the same occurrence. The $610,000 combined is well under the $1,000,000 Each Occurrence cap, so all of it is paid. If Coverage A damages alone had been $995,000, the available med pay would be squeezed because the occurrence limit caps the SUM of Coverage A damages and Coverage C med pay for any one occurrence.