Bodily Injury, Property Damage & Personal Injury
Key Takeaways
- Liability grants cover bodily injury (physical injury, sickness, disease, and resulting death) and property damage (physical injury to or loss of use of tangible property).
- Personal injury covers named offenses such as false arrest, wrongful eviction, libel, slander, and invasion of privacy.
- Advertising injury covers offenses in the insured's advertising, such as copyright or slogan infringement and disparagement.
- Classify the claim first; the category determines whether homeowners Section II, CGL Coverage A or B, or a specialty policy responds.
What Liability Policies Pay For
Liability coverage is defined by the kinds of harm it addresses. The standard grants are bodily injury and property damage; broader forms add personal and advertising injury. Each is a defined term, and the exam expects you to classify a claim correctly because the wrong category can mean no coverage.
| Category | Covers |
|---|---|
| Bodily injury (BI) | Physical injury, sickness, or disease, including resulting death |
| Property damage (PD) | Physical injury to tangible property or loss of its use |
| Personal injury | Offenses: false arrest, malicious prosecution, wrongful eviction, libel, slander, invasion of privacy |
| Advertising injury | Offenses in advertising: copyright/slogan infringement, disparagement |
Bodily Injury and Property Damage
Bodily injury means physical injury, sickness, or disease sustained by a person, including death that results, and it generally includes the resulting pain, suffering, and mental anguish. Property damage means physical injury to tangible property, including loss of use of that property, and loss of use of tangible property that is not physically injured. The word tangible is tested: purely economic loss or damage to intangible property (data, in older forms) may not qualify as property damage, which is why cyber exposures are insured separately.
Personal and Advertising Injury
Personal injury (sometimes combined as personal and advertising injury in commercial forms) covers a list of named offenses rather than accidents: false arrest, detention, or imprisonment; malicious prosecution; wrongful eviction or invasion of privacy of a room or dwelling; oral or written publication that libels, slanders, or disparages; and invasion of privacy. Advertising injury covers offenses committed in the insured's advertising, such as infringing another's copyright, trade dress, or slogan, or disparaging a competitor's goods.
These coverages respond to offenses regardless of the occurrence trigger's bodily-injury framing, and they are added to homeowners liability by the personal-injury endorsement and built into commercial general liability as Coverage B.
Why Classification Matters
The exam tests classification because coverage and limits differ by category. A guest's broken leg is bodily injury; a contractor ruining a client's hardwood floor is property damage; a business falsely accusing a competitor of fraud in an ad is advertising injury; and a landlord wrongfully evicting a tenant commits a personal injury offense. A claim that does not fit any covered category, such as a pure financial loss with no bodily injury, property damage, or named offense, may fall to a professional-liability or specialty policy instead.
When you read a liability scenario, name the category first, BI, PD, personal injury, or advertising injury, then locate the coverage that insures that category, because the category determines whether the homeowners Section II, the CGL Coverage A or B, or a separate specialty policy responds, and that determination is the heart of most liability questions on the exam.
A retailer's advertisement falsely accuses a competitor of selling counterfeit goods, disparaging the competitor's products. Which liability category does this fit?
Which loss qualifies as 'property damage' under a standard liability definition?
Naming the Category to Find the Coverage
Liability coverage is defined by the harm it addresses, so classifying the claim is the first step. Bodily injury is physical injury, sickness, or disease (including resulting death and the accompanying pain and suffering). Property damage is physical injury to tangible property or loss of its use; purely economic loss and damage to intangibles (like data) may not qualify, which is why cyber exposures need separate coverage.
Personal injury covers named offenses, false arrest, malicious prosecution, wrongful eviction, libel, slander, and invasion of privacy, and advertising injury covers offenses in the insured's advertising, such as disparagement and copyright, trade-dress, or slogan infringement. These are offenses, not accidents, and are added to homeowners liability by endorsement and built into the CGL as Coverage B.
| Harm | Category |
|---|---|
| Broken leg | Bodily injury |
| Ruined hardwood floor | Property damage |
| Defaming a competitor in an ad | Advertising injury |
| Wrongful eviction of a tenant | Personal injury |
Classification decides which policy and limit respond. A guest's slip-and-fall is bodily injury (and possibly medical payments); a contractor ruining a client's floor is property damage; a business disparaging a competitor in an ad is advertising injury; a landlord wrongfully evicting a tenant commits a personal-injury offense; and a patent-infringement claim is excluded.
When you read a liability scenario, name the category first, BI, PD, personal injury, or advertising injury, then locate the coverage (homeowners Section II, CGL Coverage A or B, or a specialty policy) that insures that category.
Name the category of harm first, because it determines which coverage responds. Bodily injury is physical injury, sickness, or disease; property damage is physical injury to tangible property or loss of its use (so purely economic loss and data are not property damage, which is why cyber needs separate coverage). Personal injury covers offenses such as false arrest, wrongful eviction, libel, and slander, and advertising injury covers ad offenses such as disparagement and slogan infringement.
A slip-and-fall is bodily injury; a ruined floor is property damage; an ad disparaging a competitor is advertising injury; a wrongful eviction is a personal-injury offense.
Because the property-damage definition requires injury to tangible property, a claim for purely economic loss, lost profits, diminished value with no physical harm, or damage to data is generally not property damage, which is precisely why such losses are routed to professional-liability, business-income, or cyber coverage rather than to the standard bodily-injury and property-damage grant.