10.2 CGL Coverage B: Personal and Advertising Injury, Coverage C: Medical Payments
Key Takeaways
- Coverage B pays for personal and advertising injury (P&AI) caused by an enumerated offense committed in the conduct of the insured's business, not by an occurrence.
- The seven P&AI offenses include false arrest, malicious prosecution, wrongful eviction, libel/slander, invasion of privacy, copying another's advertising idea, and infringement of copyright, slogan, or title in an advertisement.
- Coverage B is subject to its own Personal and Advertising Injury Limit and shares the General Aggregate; it carries offense-specific exclusions such as knowing falsehood, prior publication, and IP infringement (other than the advertisement exception).
- Coverage C, Medical Payments, is a no-fault, goodwill coverage that pays reasonable medical expenses regardless of the insured's liability, typically up to a $5,000 per-person sublimit.
- Med Pay applies to injuries on the insured's premises or arising from operations and must be reported and treated within set time frames; it does not apply to the insured or employees.
Coverage B: Personal and Advertising Injury Liability
Coverage B of the Commercial General Liability (CGL) policy insures personal and advertising injury (P&AI). Unlike Coverage A, the trigger is not an occurrence; it is the commission of a defined offense in the conduct of the insured's business during the policy period. The insurer pays sums the insured is legally obligated to pay as damages because of P&AI, and it has the duty to defend related suits.
The Seven Enumerated Offenses
Personal and advertising injury is defined as injury, including consequential bodily injury, arising out of one or more of these offenses:
- False arrest, detention, or imprisonment.
- Malicious prosecution.
- Wrongful eviction, wrongful entry, or invasion of the right of private occupancy of a room/dwelling the insured owns or occupies.
- Oral or written publication of material 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.
Key Definitions and Limits
Advertisement means a notice broadcast or published to the general public or specific market segments about goods, products, or services to attract customers; it includes material on websites and (per the 2013 edition) blogs and chatrooms only so far as they advertise.
Coverage B has its own Personal and Advertising Injury Limit, which is the most the insurer pays for all P&AI sustained by any one person or organization. Crucially, Coverage B payments also reduce and are capped by the General Aggregate Limit — they do not have a separate aggregate.
Coverage B Exclusions
Because Coverage B reaches intentional-style torts, its exclusions police bad-faith conduct:
| Exclusion | Effect |
|---|---|
| Knowing violation of rights | No coverage if the insured knew the act would inflict P&AI |
| Material published with knowledge of falsity | Deliberate lies are excluded |
| Prior publication | Material first published before the policy period is excluded |
| Criminal acts | P&AI from a crime by/at the direction of the insured |
| Contractual liability | P&AI assumed under contract |
| Breach of contract | Advertising-idea breach excluded |
| Quality/performance of goods | Failure of goods to conform to advertised quality |
| Intellectual property | Patent, trademark, trade-secret infringement — except the copyright/trade-dress/slogan-in-an-advertisement offense |
Trap: general patent and trademark infringement is excluded; only the narrow advertisement infringement offense (copyright, trade dress, slogan) is covered.
An insured's social-media ad copies a competitor's distinctive slogan, prompting an infringement suit. How does the CGL respond?
Coverage C: Medical Payments
Coverage C, Medical Payments (Med Pay), is a no-fault goodwill coverage. The insurer 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 whether the insured is legally liable.
Its purpose is to settle small injuries quickly and prevent them from escalating into Coverage A liability suits. The standard sublimit is typically $5,000 per person, shown on the Declarations as the Medical Expense Limit (any one person).
Med Pay Conditions, Time Limits, and Exclusions
Med Pay applies only if:
- The accident occurs in the coverage territory and during the policy period;
- The expenses are incurred and reported to the insurer within one year of the accident date; and
- The injured person submits to exams by the insurer's physicians as often as reasonably required.
Covered expenses include first aid at the time of accident, necessary medical/surgical/dental services, and funeral expenses. Med Pay does NOT apply to:
- Any insured (other than volunteer workers in some cases) or any employee (use workers comp);
- A person hired to do work for the insured;
- The tenant's injury on rented premises; or
- Injury covered by Coverage A products-completed operations or excluded under Coverage A.
Coverage A vs. Coverage C: The No-Fault Distinction
The most-tested contrast is liability:
| Feature | Coverage A (BI/PD) | Coverage C (Med Pay) |
|---|---|---|
| Fault required? | Yes — insured must be legally liable | No — pays regardless of fault |
| Trigger | Occurrence | Accident on premises/from operations |
| Typical limit | Each Occurrence (e.g., $1,000,000) | ~$5,000 per person |
| Defense | Insurer defends suits | No defense; pays bills directly |
| Who is paid | Third party via judgment/settlement | Injured third party, promptly |
Worked example: A shopper trips over a clearly marked cord and bruises a knee, incurring $1,800 in bills. Even if the insured is not negligent, Coverage C pays the $1,800 (within the $5,000 sublimit) as goodwill. If the shopper later sues alleging negligence and wins $40,000, that judgment shifts to Coverage A, and any Med Pay already paid is typically credited against the Coverage A payment.
A customer slips in the insured's store with no negligence by the insured and incurs $900 in medical bills. Which coverage most readily pays, and why?
Coverage B vs. Coverage C - No Fault and the Offenses List
CGL Coverage B (Personal & Advertising Injury) and Coverage C (Medical Payments) operate on very different principles, and the exam tests the contrast directly.
| Feature | Coverage B - Personal & Advertising Injury | Coverage C - Medical Payments |
|---|---|---|
| Trigger | A listed offense, not an accident | Bodily injury, no fault needed |
| Limit | Separate per-person/aggregate | Small per-person sublimit (e.g., $5,000) |
| Defense | Inside or in addition per form | Pays medical only, no defense |
Coverage B responds to a closed list of offenses: false arrest/imprisonment, malicious prosecution, wrongful eviction or invasion of privacy of a room/dwelling, slander/libel, violation of privacy, and copyright/slogan/advertising-idea infringement in the insured's advertisement.
Exam Trap: Coverage C (Med Pay) pays a third party's medical bills regardless of fault - a goodwill payment that can defuse a lawsuit - but it does not apply to the insured, the insured's employees (workers comp), tenants, or injuries on premises the insured rents to others. It must be reported and bills incurred within a stated time (commonly one year) of the accident.