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

Coverage B: Personal and Advertising Injury

Where Coverage A addresses physical harm, Coverage B insures liability for personal and advertising injury — non-physical harm to reputation, privacy, or intellectual property. Coverage applies only when the injury arises out of a listed offense committed in the conduct of the insured's business.

The Enumerated Offenses (CG 00 01)

• False arrest, detention, or imprisonment
• Malicious prosecution
• Wrongful eviction, wrongful entry, or invasion of the right of private occupancy of a room or premises the person occupies
• Oral or written publication that slanders or libels (defamation) a person or organization
• 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 an advertisement

Note the trigger is a covered offense, not an occurrence. There is no per-occurrence requirement and no requirement of an accident.

Why the Offense Trigger Matters

Because Coverage B responds to a listed offense, a single act of defamation can trigger coverage even though it is intentional conduct (so long as it was not committed with knowledge of falsity). This is different from Coverage A, which requires an accidental occurrence. The Coverage B limit is the Personal and Advertising Injury Limit ($1,000,000 standard), a per-person/per-organization limit that is also subject to the General Aggregate.

Coverage B Exclusions and the IP Trap

A frequently missed point: ordinary copyright, patent, trademark, or trade secret infringement is excluded under Coverage B — except infringement in an advertisement of a copyright, trade dress, or slogan. Patent and trademark infringement are not covered offenses.

Other key Coverage B exclusions:

• Knowing violation of the rights of another (intentional torts known to cause P&AI).
• Material published with knowledge of its falsity (knowingly false defamation).
• Material first published before the policy period (prior publication).
• Breach of contract, except liability for false-advertising offenses assumed in a contract.
• Insureds in the business of advertising, broadcasting, publishing, or telecasting (for the advertising offenses).

Exam trap: An insured runs an ad that repeats a statement it already knew was defamatory — denied under the knowing falsity and prior publication concepts. By contrast, an unintentional libel in a new ad is covered.

Coverage C: Medical Payments

Coverage C — Medical Payments pays reasonable medical expenses for bodily injury caused by an accident:

• on premises the insured owns or rents;
• on ways next to (immediately adjoining) those premises; or
• because of the insured's operations.

It is a goodwill, no-fault coverage: it pays regardless of the insured's legal liability, which is the key contrast with Coverage A (Coverage A requires legal liability; Coverage C does not).

Reporting and Timing Rules

• The accident must take place during the policy period and in the coverage territory.
• Expenses must be incurred and reported within one year of the accident date.
• The injured person must submit to examination by the insurer's physicians and authorize release of medical records.

Who is excluded from Coverage C: any insured (except volunteer workers), employees injured on the job, persons normally occupying the insured's premises (e.g., tenants), anyone covered by workers compensation, and persons injured while taking part in athletics. Exam trap: an injured employee is excluded from Coverage C — that exposure belongs on workers compensation.

Why Coverage C Pays Without Liability

Coverage C is intentionally small and no-fault because its purpose is to settle minor injuries quickly and prevent them from becoming Coverage A lawsuits. By paying a few thousand dollars in medical bills as a goodwill gesture, the insurer hopes an injured customer never hires a lawyer to pursue a liability claim. Payment under Coverage C is not an admission of liability by the insured.

How the Limits Interact

• The Medical Expense Limit is a per-person limit (commonly $5,000 or $10,000).
• Coverage C payments are subject to the General Aggregate — once the aggregate is exhausted, no further Medical Payments are available.
• If a person is paid under Coverage C and later wins a Coverage A judgment, amounts paid under C are credited against the Coverage A damages so the insurer does not pay twice for the same injury.

Worked example: A customer trips on a wet floor and incurs $4,200 in medical bills. Under a $5,000 Medical Expense Limit, the insurer pays the $4,200 with no liability finding. If the customer later sues and recovers $30,000 under Coverage A, the $4,200 already paid is deducted, so Coverage A pays $25,800.

Coverage B and C Limits at a Glance

Both Coverage B and Coverage C losses erode the General Aggregate, not the Products-Completed Operations Aggregate.