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

The Insuring Agreements of the CGL

The ISO Commercial General Liability policy is built around three coverages, each with its own insuring agreement and limit. Knowing what each covers — and the precise defined terms — is essential.

Coverage A and B both pay damages the insured is legally liable for; Coverage C pays medical expense without regard to fault, as a goodwill, claims-reducing benefit.

Bodily Injury vs. Property Damage (Coverage A)

Bodily injury (BI) is defined as bodily injury, sickness, or disease sustained by a person, including death that results. Many forms now add mental anguish if it stems from physical injury.

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 (e.g., a road blocked by the insured's spilled cargo).

Trap: 'Tangible property' excludes purely economic or electronic data losses in the base form. Data is not tangible property under the unendorsed CGL, so corrupting a customer's database is not PD.

Personal and Advertising Injury (Coverage B)

Coverage B is triggered by an offense, not an accident, and is the place the CGL adds back certain intentional torts. The seven enumerated offenses are tested by name:

• 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 a person or organization
• Oral or written publication that violates a person's right of privacy
• The use of another's advertising idea in your advertisement
• Infringing on copyright, trade dress, or slogan in your advertisement

Trap: Patent and trademark infringement are excluded from Coverage B — only copyright, trade dress, and slogan are covered.

CGL Limits and How They Interact

The CGL carries several limits that stack in a defined order. Worked numerics on the aggregate are common.

Worked Aggregate Example

A CGL shows a $1,000,000 Each Occurrence limit and a $2,000,000 General Aggregate. Three unrelated premises occurrences produce judgments of $800,000, $900,000, and $700,000. Each is within the per-occurrence limit, but the policy pays only $800,000 + $900,000 = $1,700,000 on the first two; the third is limited to the remaining $300,000 of the $2,000,000 general aggregate. The insured is uninsured for the final $400,000 until the policy renews and the aggregate resets.

Coverage C Medical Payments and the Two-Aggregate Structure

Coverage C (Medical Payments) pays reasonable medical expense for bodily injury to others — regardless of the insured's legal liability — when the injury happens on the insured's premises or arises from operations, usually if incurred and reported within a set period (commonly one to three years). It is a small, goodwill payment that can head off a larger liability suit, and it does not apply to the insured's own employees or to the named insured.

Why Two Aggregates Exist

The CGL separates a Products-Completed Operations Aggregate from the General Aggregate because product and completed-work claims often surface late and in clusters; isolating them keeps a wave of product claims from exhausting the limits available for ordinary premises and operations losses, and vice versa. Med Pay and Coverage B losses draw against the general aggregate, not the products-completed-ops aggregate.

Putting the Definitions to Work

• A customer slips in the store: Coverage A (BI, occurrence) or a small Coverage C Med Pay payment.
• A contractor's finished roof later collapses and injures a tenant: products-completed operations, drawing on that separate aggregate.
• The insured's ad copies a competitor's slogan: Coverage B, personal and advertising injury, against the general aggregate.

Trap: Coverage C pays without regard to fault, so a question stating 'the insured was not negligent' does not by itself defeat a Med Pay claim — but it would defeat a Coverage A liability claim.

Who Is an Insured and the Key Exclusions

The CGL automatically insures the named insured plus, depending on entity type, its employees (for acts within their duties, but not for injury to fellow employees), volunteers, and newly acquired organizations for a limited window.

Heavily tested exclusions narrow Coverage A: the expected-or-intended exclusion (no coverage for deliberate harm), the contractual liability exclusion (with an 'insured contract' carve-back), the pollution exclusion, the auto/aircraft/watercraft exclusion (those exposures belong on other policies), the workers compensation / employer's liability exclusion, and the 'your work' / 'your product' exclusions that bar paying to repair the insured's own defective work.

Recognizing that a faulty-workmanship claim is normally excluded — while the resulting damage to other property may be covered — is a classic CGL exam distinction.