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

Coverage B: Personal and Advertising Injury Liability

Coverage B responds to injury arising out of specific offenses rather than an accidental 'occurrence.' This is a critical exam distinction: Coverage A is triggered by an occurrence; Coverage B is triggered by the commission of a listed offense during the policy period in the conduct of the insured's business. Like Coverage A, Coverage B carries the insurer's right and duty to defend, and defense costs are again payable in addition to the limits.

The Listed Offenses

'Personal and advertising injury' means injury, including consequential bodily injury, arising out of one or more of these enumerated offenses:

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

Coverage B Limits and Exclusions

Coverage B is subject to its own Personal and Advertising Injury Limit (commonly equal to the Each Occurrence Limit, e.g., $1,000,000), and it shares the General Aggregate with Coverage A. It does not draw on the Products-Completed Operations Aggregate.

Key exclusions to memorize: injury caused knowingly (intentional violation of another's rights), oral/written publication the insured knew was false, breach of contract, the failure of goods to conform to advertised quality, wrong description of price, and offenses by businesses in media/advertising, telecasting/broadcasting, or internet chat-room/search-engine operations. Patent and trademark infringement (other than trade dress) are not covered offenses.

A recurring exam trap is the 'first publication' rule: Coverage B excludes injury arising out of material whose first publication took place before the policy period began. So a defamatory ad that first ran under last year's policy is not picked up by this year's Coverage B even if a suit arrives now. Note also that 'advertisement' is broadly defined to include internet content an insured posts about its goods or services — relevant for modern small-business clients.

Coverage C: Medical Payments

Coverage C pays 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. It is a no-fault, goodwill coverage: payment is made regardless of the insured's legal liability, which is why it discourages small claims from becoming liability suits.

Medical expenses include first aid at the time of an accident; necessary medical, surgical, dental, x-ray, ambulance, hospital, professional nursing, and funeral services. Expenses must be incurred and reported within a stated window — typically within one year of the date of the accident.

To trigger Coverage C, three conditions must all be met: the accident takes place in the coverage territory and during the policy period; the expenses are incurred and reported within one year; and the injured person submits to examination by the insurer's physicians as often as reasonably required. Because payment is goodwill, the insurer may decline to pay if it sees a med-pay payment as an admission helping a future liability claim, but the standard intent is to settle small injuries quickly and prevent escalation to a Coverage A suit.

Coverage C Limit and Coordination

Coverage C carries a low Medical Expense Limit (per person), commonly $5,000 or $10,000, separate from the per-occurrence liability limit but subject to the General Aggregate. Because Coverage C is no-fault, an injured person who later sues is paid under Coverage A; any med-pay already paid is typically credited against the Coverage A damages so the insured does not pay twice.

Med pay does not apply to any insured (other than a volunteer worker), employees injured in employment (workers' comp territory), or to bodily injury excluded under Coverage A.

The Coverage B Knowledge-of-Falsity and Prior-Publication Traps

Coverage B's exclusions are the exam's favorite Coverage B content.

Coverage B does not apply to injury caused by or at the direction of the insured with knowledge that the act would violate another's rights (intentional defamation), to oral or written publication of material the insured knew was false, to material first published before the policy period (the prior-publication exclusion), to criminal acts, to breach of contract (except an implied contract to use another's advertising idea), to the failure of goods to conform to advertised quality, and to injury arising out of the insured's wrong description of price.

Coverage B also excludes intellectual-property infringement (patent, trademark, copyright) except for infringement in the insured's advertisement of copyright, trade dress, or slogan. The takeaway for multiple-choice items: a genuine, unintentional slander, false-arrest, or advertising-injury offense triggers Coverage B, but knowledge of falsity, prior publication, or a pure IP/contract dispute knocks it out.