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

Coverage B: Personal and Advertising Injury

Coverage B insures liability for personal and advertising injury caused by an enumerated offense arising out of the insured's business. Unlike Coverage A, which addresses physical harm, Coverage B covers non-physical wrongs - injuries to reputation, privacy, and certain intellectual-property rights committed in the course of advertising.

A crucial distinction tested heavily: Coverage A requires an occurrence (accident); Coverage B responds to an offense, which can be intentional conduct (such as publishing defamatory material) so long as it falls within the listed offenses.

The Seven Listed Offenses (Exam Gold)

The ISO definition of 'personal and advertising injury' lists exactly seven offenses. Memorize them - questions ask which item is NOT covered.

Trap: Patent and trademark infringement are EXCLUDED from Coverage B (except trade dress and slogan in your advertisement). Bodily injury is NOT a Coverage B trigger - that belongs to Coverage A. Breach of contract and 'known falsity' (statements the insured knew were false) are also excluded.

Coverage B Limit Structure and Key Exclusions

Coverage B has its own per-person/per-organization limit (the 'Personal and Advertising Injury Limit'), commonly $1,000,000, and it erodes the general aggregate the same way Coverage A does. There is no separate products-completed operations interaction for Coverage B.

Coverage B carries its own targeted exclusions that frequently appear on exams. There is no coverage for offenses arising out of:

• Knowing violation of the rights of another (intentional wrongdoing where the insured knew the act would harm).
• Material published with knowledge of its falsity (deliberate lies, distinct from accidental defamation).
• Material first published before the policy period (the wrong predates coverage).
• Breach of contract, except an implied contract to use another's advertising idea.
• Insureds in the business of advertising, broadcasting, publishing, or telecasting (they need media liability coverage instead).
• Quality or performance of goods (failure of goods to conform to advertised statements).

Exam contrast: Coverage A excludes 'expected or intended' injury; Coverage B similarly excludes 'knowing' violations and knowing falsity - in both, deliberate harm by the insured is outside the grant.

Coverage C: Medical Payments

Coverage C pays reasonable medical expenses for bodily injury caused by an accident on the insured's premises or arising from the insured's operations - regardless of fault. This is goodwill, no-fault coverage designed to settle minor injuries quickly and discourage lawsuits.

Key features candidates must know:

• No-fault basis: Coverage C pays without proof of the insured's legal liability. (Contrast with Coverage A, which requires legal obligation.)
• Time limit: medical expenses must be incurred and reported within one year of the date of the accident.
• Sublimit: a low per-person cap, typically $5,000 or $10,000 each person.
• Excludes the insured and employees: payments are for third parties, not the named insured, employees injured on the job (workers' comp), tenants, or athletic-event participants.

Worked Numeric: Med Pay vs. Coverage A

A visitor trips in the insured's lobby. Medical bills total $4,200; the visitor later sues for $60,000 alleging negligence.

• Coverage C (Med Pay): With a $5,000 per-person limit, the insurer can pay the $4,200 medical bill immediately, no fault required. This often resolves the matter before litigation.
• Coverage A (BI): If the visitor sues and the insured is found legally liable, the $60,000 claim is handled under Coverage A (subject to the each-occurrence limit), and any Med Pay already paid for the same injury is typically credited/deducted so the insurer does not pay twice for the same bodily injury.

Trap: Med Pay does not require fault, but if the same injury becomes a liability judgment, amounts paid under Coverage C reduce what is owed under Coverage A - the policy will not duplicate payment for identical bodily injury.

Coverage C Exclusions to Remember

Medical Payments will not pay for bodily injury to the following:

• The named insured or anyone hired by or working for the insured.
• A tenant occupying the insured's premises, or a person injured on premises the insured owns or rents that the injured person also normally occupies.
• Anyone eligible for workers' compensation benefits.
• Those injured while taking part in athletics.
• Injury arising out of the products-completed operations hazard.

These exclusions push genuine third-party liability claims back to Coverage A and keep work-related injuries inside the workers' compensation system - a distinction examiners test by asking which coverage part 'pays first' for an employee versus a customer.