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

Coverage B: Personal and Advertising Injury Liability

Coverage B of the CGL (CG 00 01) responds to personal and advertising injury caused by an offense arising out of the named insured's business. Unlike Coverage A, the trigger is not an occurrence (accident) — it is the commission of a listed offense during the policy period. This is a critical distinction the exam tests directly.

Coverage B is subject to its own limit, the Personal and Advertising Injury Limit, which applies per person or organization and is capped by the General Aggregate Limit. It is NOT subject to the each-occurrence limit.

Why "Offense" Replaced "Occurrence" Here

In 1998 ISO merged the older "personal injury" and "advertising injury" coverages into the single Coverage B term. The shift to an offense trigger matters because many Coverage B torts are intentional acts (publishing a statement, evicting a tenant) that could never qualify as an accidental "occurrence." The policy still requires the offense be committed during the policy period and arise out of the named insured's business, so an offense an insured committed before the inception date is barred by the prior-publication exclusion.

The Defined Offenses

"Personal and advertising injury" is a single defined term covering injury arising out of these seven offenses:

• 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 (defamation)
• Oral or written publication 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

Trap: patent infringement and trademark infringement (other than slogan/trade dress in an advertisement) are NOT covered offenses.

Coverage B Exclusions

Coverage B carves out offenses where the insured acted improperly or where the exposure belongs to another form:

• Knowing violation of another's rights / material published with knowledge of its falsity.
• Material first published before the policy period (the prior-publication exclusion).
• Criminal acts committed by or at the direction of the insured.
• Breach of contract (except an implied contract to use another's advertising idea).
• Quality or performance of goods ("failure to conform to statements").
• Insureds in media and Internet businesses — advertising, broadcasting, and Internet-business insureds are excluded for certain offenses.

Note that pollution and most Coverage A business-risk exclusions are unique to Coverage A; Coverage B has its own exclusion set.

Coverage C: Medical Payments

Coverage C 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. This goodwill, no-fault coverage is designed to settle small injuries quickly and discourage larger liability suits.

Medical expenses must be incurred and reported within one year of the date of the accident. Coverage C pays first aid at the time of the accident, necessary medical, surgical, dental, ambulance, hospital, professional nursing, and funeral services.

The Strategic Purpose of No-Fault Med Pay

Because Coverage C requires no admission or finding of liability, an insurer can pay a customer's modest medical bill immediately and often head off a far larger Coverage A lawsuit. The small per-person limit ($5,000 or $10,000 is typical) reflects this goodwill purpose. If the injured person later pursues a liability claim and the insured is found legally responsible, the Coverage A payment for the same person and occurrence is reduced by amounts already paid under Coverage C, preventing a double recovery for the identical injury.

Coverage C Limit and Interaction

Coverage C is subject to the Medical Expense Limit, stated as a per-person amount (commonly $5,000 or $10,000). Payments under Coverage C are also subject to and reduce the Each Occurrence Limit and erode the General Aggregate.

Trap: Coverage C does NOT pay medical expenses for the named insured, employees injured in the course of employment, tenants, or persons hurt by the insured's products away from the premises (those route to Coverage A or workers' comp).

Worked Numeric: Coverage C vs. Each Occurrence

Limits: Each Occurrence $1,000,000 / Medical Expense $10,000 per person. A customer slips in the insured's store. The store pays a $4,000 Coverage C medical payment (no-fault, paid quickly). The customer later sues and recovers a $300,000 BI judgment under Coverage A.

• Coverage C pays $4,000 (within the $10,000 per-person Med Pay limit).
• Coverage A pays the $300,000 judgment, but the each-occurrence limit available is reduced by the $4,000 already paid for that same occurrence.
• Total drawn against the Each Occurrence Limit = $304,000, well under $1,000,000.

The early Coverage C payment is credited toward the same occurrence so the insured is not paid twice for the same harm.