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

Coverage B: The Seven Offenses

Coverage B — Personal and Advertising Injury Liability pays damages the insured is legally obligated to pay for injury arising out of one or more enumerated offenses, not out of an occurrence. The seven offenses are:

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

A frequent trap: patent and trademark infringement are not covered — only copyright, trade dress, and slogan in the insured's advertisement.

Note the structural difference from Coverage A: Coverage B responds to an offense, not an occurrence, so there is no requirement of an 'accident.' The offenses are largely intentional torts (defamation, false arrest), yet they are covered here because the policy specifically grants them — a reminder that the broad Coverage A 'expected or intended' exclusion does not apply to Coverage B's named offenses.

Coverage B Trigger, Limit, and Exclusions

The trigger is an offense committed in the coverage territory during the policy period — distinct from Coverage A's occurrence/injury trigger. Coverage B carries its own per-person/organization limit (commonly $1,000,000) that also erodes the general aggregate.

Key Coverage B exclusions:

• Knowing violation — oral/written publication the insured knew was false.
• Prior publication — material first published before the policy period.
• Criminal acts committed by or at the direction of the insured.
• Contractual liability — injury the insured assumed in a contract (except liability it would have absent the contract).
• Breach of contract (except an implied contract to use another's advertising idea).
• Insureds in the business of advertising, broadcasting, publishing, or internet/web design — their professional advertising exposures are excluded.

Coverage B Limit Interaction (Worked Example)

The Personal & Advertising Injury limit is per person or organization — not per occurrence. Worked numeric: With a $1,000,000 P&AI limit and a $2,000,000 general aggregate, a libel claim by Company X settling for $1,000,000 exhausts the P&AI limit for that organization and reduces the general aggregate to $1,000,000.

A second, unrelated libel claim by Company Y later in the term draws on the remaining $1,000,000 of general aggregate. If a third P&AI claim arose after the aggregate were exhausted, the policy would pay nothing more for the term — the aggregate is the true ceiling, and Coverage B and Coverage A losses both erode the same general aggregate (products-completed operations being the lone separately-capped category).

Coverage C Medical Payments — No-Fault Goodwill

Coverage C (Medical Payments) pays reasonable medical expenses for bodily injury to others on the insured's premises or from the insured's operations, regardless of fault, if the expense is incurred and the accident happens within the policy period and the injury reported within a set time (often one year). It is a small first-aid limit (commonly $5,000-$10,000 per person) meant to settle minor injuries before they escalate into Coverage A liability suits. It does not apply to the insured, employees (workers' comp territory), tenants, or injuries on premises the insured rents to others.

Coverage B Personal and Advertising Injury Detail

Coverage B responds to seven listed offenses rather than accidents: false arrest/detention/imprisonment; malicious prosecution; wrongful eviction, entry, or invasion of private occupancy; oral or written publication that slanders or libels a person or organization; publication that violates a person's right of privacy; the use of another's advertising idea; and infringement of copyright, trade dress, or slogan in the insured's advertisement.

Coverage B has its own per-person/organization limit and shares the general aggregate. Key exclusions strip coverage for offenses the insured knew were false, prior publications, criminal acts, breach of contract, and the failure of goods to conform to advertised quality. The exam contrasts an accidental injury (Coverage A) with a committed offense like slander or wrongful eviction (Coverage B).

Coverage C: Medical Payments

Coverage C — Medical Payments is a small no-fault grant: it pays reasonable medical expenses regardless of whether the insured is legally liable. This is its defining feature and a primary reason it exists — to settle minor third-party injuries quickly and preserve goodwill, heading off larger Coverage A liability claims.

The standard limit is $5,000 per person. Coverage C applies if the bodily injury:

• Occurs on premises the insured owns or rents, or in ways arising out of the insured's operations; and
• The accident takes place in the coverage territory and during the policy period; and
• The expenses are incurred and reported within one year of the accident date.

Coverage C Limits, Time Bars, and Exclusions

Med Pay payments share the each-occurrence limit with Coverage A — they are not stacked on top of it. The covered expenses include first aid at the time of the accident, necessary medical/surgical/dental services, and ambulance/hospital/funeral expenses.

Worked numeric: A customer trips in a store and incurs $7,200 in medical bills, with no negligence by the store. With a $5,000 per-person Med Pay limit, the insurer pays $5,000 with no need to prove fault; the remaining $2,200 is unpaid unless the customer can establish a liability claim under Coverage A.

Coverage C exclusions — Med Pay does NOT apply to:

• Any insured, or an insured's employee (use Workers Compensation).
• A tenant whose injury arises from occupancy of premises rented from the insured.
• Persons injured while taking part in athletics.
• Injury covered by the products-completed operations hazard.
• Injury arising from war or, generally, from Coverage B offenses.

Because Med Pay is settled without proof of fault, an adjuster can pay it promptly to maintain goodwill and often avoid escalation into a larger Coverage A liability suit — its core business purpose. Remember the two recurring time bars: expenses must be incurred within one year of the accident, and the accident must be reported as soon as practicable with proof submitted. The injured person must also submit to exam by the insurer's physician if requested, and authorize release of medical records.