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

The Three Injury Definitions in the CGL

The ISO CGL (CG 00 01) splits liability into coverages keyed to defined harms. Memorize the definitions — the exam tests them word for word.

• Coverage A — Bodily Injury (BI) and Property Damage (PD): caused by an occurrence (an accident, including continuous or repeated exposure to substantially the same harmful conditions).
• Coverage B — Personal and Advertising Injury (PAI): caused by an offense, not an occurrence, and not dependent on an accident.
• Coverage C — Medical Payments: no-fault, goodwill payments regardless of liability.

Bodily Injury = bodily injury, sickness, or disease, including death that results. Property Damage = (1) physical injury to tangible property, including resulting loss of use, or (2) loss of use of tangible property not physically injured. Note: electronic data is not tangible property under the standard form.

Personal and Advertising Injury Offenses

Coverage B responds to a closed list of offenses, several of which are intentional acts — a key reason PAI exists separately from BI/PD.

Trap: Patent and trademark infringement are excluded from PAI; only copyright, trade dress, and slogan in your advertisement are covered.

Limits Structure and a Worked Aggregate

The CGL stacks several limits. Understanding how they interact is heavily tested.

• Each Occurrence Limit — most paid for any one occurrence (combined BI + PD).
• General Aggregate — caps total payments for the policy year (Coverage A non-products, Coverage B, and Medical Payments).
• Products-Completed Operations Aggregate — a separate annual cap for products and completed-work claims.
• Personal & Advertising Injury Limit — most for all PAI to any one person or organization.
• Damage to Premises Rented to You and Medical Payments — small sub-limits.

Worked example. Limits: $1,000,000 each occurrence / $2,000,000 general aggregate. Three unrelated liability claims hit for $800,000, $700,000, and $900,000 = $2,400,000 demanded. The insurer pays each claim up to $1,000,000, but the general aggregate caps total payments at $2,000,000; the insured is exposed for the remaining $400,000. Products-completed losses would draw on their own separate aggregate.

Reading the Triggers Together

Scenario questions combine 8.3 and 8.4. Work them in order:

1. Classify the harm — is it BI/PD (Coverage A), a listed PAI offense (Coverage B), or neither?
2. Confirm the trigger — for Coverage A, did the injury arise from an occurrence? An expected or intended injury is excluded.
3. Apply the right limit — each occurrence first, then test the applicable aggregate; products/completed-operations losses use their own aggregate.

Common traps: loss of use of undamaged property still qualifies as Property Damage; pure economic loss with no BI/PD is generally not covered under Coverage A; and damages for an intentional defamation are covered under Coverage B (PAI) even though intentional, because the expected/intended exclusion applies to BI/PD, not to the PAI offenses.

Defense Costs and the Supplementary Payments

The CGL's duty to defend is broad and, critically, defense costs are paid in addition to the limits under Supplementary Payments — Coverages A and B. This is the opposite of most professional liability forms, where defense erodes the limit ("defense within limits" / wasting limits).

Supplementary Payments the insurer pays outside the limit include:

• All expenses the insurer incurs and the cost of bonds to release attachments (up to the limit).
• Up to $250 for bail bonds required by an accident covered by the policy.
• Reasonable expenses the insured incurs at the insurer's request, including up to $250 a day for lost earnings.
• Post-judgment interest on the entire judgment, and pre-judgment interest awarded against the insured on the part of the judgment the insurer pays.

Once the insurer exhausts the applicable limit in settlement or judgment, its duty to defend ends.

Medical Payments and How the Coverages Interact

Coverage C — Medical Payments is a small, no-fault, goodwill coverage that pays medical expenses for bodily injury to others (not insureds or employees) regardless of the insured's liability, if the injury occurs on the insured's premises or arises from operations. Because it requires no proof of fault, it often heads off larger Coverage A liability suits. Medical Payments draws against the general aggregate.

Worked sub-limit example. A guest is injured; the insured's CGL pays the guest's $4,000 of medical bills under Med Pay even though no negligence is proven. If the guest later sues alleging negligence, any Med Pay already paid is typically credited against a Coverage A liability settlement, preventing double recovery.