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

Coverage B: Personal and Advertising Injury Liability

Coverage B is a distinct insuring agreement within CG 00 01. It does not require bodily injury or property damage and does not require an occurrence. Instead, it responds to enumerated offenses committed in the course of the named insured's business. The injury must arise out of one of seven listed offenses.

The seven Personal and Advertising Injury offenses are:

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

Coverage B Trigger, Limit, and Defense

Coverage B applies if the offense was committed during the policy period in the coverage territory, regardless of when the resulting injury appears. Like Coverage A, the insurer has the right and duty to defend, and defense costs are paid in addition to the limit. Because Coverage B is offense-based rather than occurrence-based, there is no "each occurrence" analysis; the controlling question is simply when the listed offense was committed.

Limit application: Coverage B has a single Personal and Advertising Injury Limit that applies per person or organization. In CG 00 01 04 13 this limit shares the same dollar amount as the Each Occurrence limit by default (commonly $1,000,000), but it is a separate limit line on the declarations. Payments under Coverage B do erode the General Aggregate Limit, so a large advertising-injury settlement reduces the dollars available for later Coverage A bodily-injury claims in the same policy year.

Key Coverage B Exclusions

Exams test the major Coverage B exclusions because they distinguish covered marketing torts from intentional or business conduct:

• Knowing violation of the rights of another (statements made with knowledge they were false)
• Material published with knowledge of falsity
• Material published before the policy period began
• Criminal acts committed by or at the direction of the insured
• Contractual liability (assumed liability, with exceptions)
• Breach of contract (except misappropriation of advertising ideas under an implied contract)
• Quality or performance of goods (failure to conform to statements - this is a "failure to perform" exclusion)
• Infringement of patent, trademark, or trade secret (note: copyright, trade dress, and slogan ARE covered, but patents/trademarks are excluded)

Trap: Coverage B covers copyright, trade dress, and slogan infringement in your advertisement, but patent and trademark infringement are excluded.

Note also the "first publication" rule: if disparaging or privacy-violating material was first published before the policy period began, it is excluded even if it continued to be published during the term. This prevents an insured from buying a Coverage B policy after a defamatory campaign has already begun and then claiming coverage for ongoing republication.

Coverage C: Medical Payments

Coverage C is a no-fault, goodwill coverage. It pays medical expenses for bodily injury caused by an accident on the insured's premises, on ways next to those premises, or because of the insured's operations - regardless of fault. Because no liability needs to be established, it functions to settle minor injuries quickly and head off larger liability suits.

Medical payments are paid for reasonable expenses for first aid at the time of an accident, medical/surgical/dental/X-ray/ambulance/hospital/professional nursing, and funeral services, provided the expenses are incurred and reported within one year of the date of the accident.

The Medical Expense Limit applies per person (a common default is $5,000 per person, though $10,000 is often selected). Coverage C payments erode the General Aggregate Limit. Because Coverage C requires no proof of negligence, insurers use it strategically: paying a modest medical bill quickly can prevent an injured claimant from retaining counsel and pursuing a much larger Coverage A liability claim, preserving both goodwill and aggregate limits.

Unlike Coverages A and B, Coverage C does not carry a duty to defend - there is no suit to defend because medical payments are made voluntarily without any determination of legal liability. The insured cannot demand that the insurer pay medical payments to anyone the policy excludes, and the insurer's decision to pay under Coverage C is not an admission of fault.

Coverage C Exclusions and the BI/Limit Relationship

Medical Payments is excluded for:

• Any insured (the named insured, employees, tenants of the premises)
• A person injured on the job (workers comp situation)
• A person injured while taking part in athletics
• Bodily injury excluded under Coverage A
• Products-completed operations hazard injuries

Worked example. A customer slips in a store. The Coverage C Medical Expense Limit is $10,000 per person. The customer incurs $4,500 in medical bills reported within the year. The insurer pays the $4,500 as medical payments without any finding of fault. If the customer later sues and proves negligence, Coverage A responds for additional damages; amounts already paid under Coverage C are typically credited against any Coverage A judgment so the insured is not paying twice for the same injury.