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

Coverage B: Personal and Advertising Injury Liability

While Coverage A handles physical harm, Coverage B of the ISO CGL (CG 00 01) responds to non-physical injuries arising out of certain offenses. The defining feature on the exam: Coverage B is triggered by named offenses, not by an occurrence. There is no need to prove an accident — committing a listed offense in the conduct of the business triggers coverage.

The Seven Listed Offenses

Personal and advertising injury means injury arising out of one or more of these offenses:

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

Coverage B Triggers and Defense

Like Coverage A, the insurer has the right and duty to defend suits seeking covered damages, and defense is paid as a supplementary payment in addition to the limits. Coverage B does not require BI or PD; it covers reputational and intangible harms. The exam frequently tests the distinction: a defamation suit against a business is a Coverage B matter, not Coverage A.

Distinguishing Coverage A from Coverage B

Students confuse these because both pay third-party liability. The cleanest test: ask whether the harm is physical (a person hurt or property damaged) or intangible (reputation, privacy, wrongful detention, advertising rights).

• Physical harm from an accident -> Coverage A (occurrence-based).
• One of the seven named offenses -> Coverage B (offense-based).

A slip-and-fall is Coverage A. A magazine ad that copies a rival's slogan is Coverage B. The same incident can occasionally touch both, but the trigger language is what the exam is testing.

Coverage B Exclusions

Key exclusions strip out conduct that is not insurable or belongs elsewhere:

• Offenses committed with knowledge of falsity (knowingly publishing false material).
• Material published before the policy period began.
• Criminal acts committed by or at the direction of the insured.
• Breach of contract (except certain implied advertising-idea contracts).
• Quality/performance failures of goods described in the insured's advertisement.
• Offenses arising out of the insured's business of advertising, broadcasting, publishing, or telecasting (media firms need a media liability policy instead).

The Personal and Advertising Injury Limit

Coverage B carries its own Personal and Advertising Injury Limit, which is the most paid for all such injury sustained by any one person or organization. Payments under Coverage B also erode the General Aggregate.

Because Coverage B shares the General Aggregate with Coverage A and C, heavy advertising-injury claims can reduce dollars available for premises/operations losses.

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 those premises, or because of the insured's operations. The defining feature: medical payments are made regardless of fault — it is a goodwill, no-fault coverage designed to settle small injuries quickly and discourage lawsuits.

Coverage C Conditions and Time Limit

For Coverage C to apply, all of the following must be true:

• The accident takes place in the coverage territory during the policy period.
• Expenses are incurred and reported within one year of the date of the accident.
• The injured person submits to examination by the insurer's physicians if requested.

Medical expenses include first aid at the time of an accident, necessary medical, surgical, dental, and ambulance services, and funeral expenses. The one-year reporting window is a frequently tested numeric.

Coverage C Limit and Who Is Excluded

Coverage C is capped by the Medical Expense Limit, stated as a per-person amount, and each payment also reduces the Each Occurrence Limit shared with Coverage A. Medical payments are not available to:

• Any insured (other than volunteer workers in limited cases).
• A person hired to do work for the insured (an employee — a workers' comp matter).
• A person injured while taking part in athletics.
• Persons whose injury is covered by workers' compensation.

Worked Example: No-Fault Medical Payments

A customer slips in a store and incurs $4,000 in treatment, reported within a month. With a $5,000 Medical Expense Limit, the insurer pays the full $4,000 without any fault determination.

Now suppose a second customer is hurt in the same accident and incurs $6,000. The per-person limit is $5,000, so that customer receives $5,000, not the full $6,000. Remember the limit is per person, while the shared Each Occurrence limit still caps the total — a frequent two-step exam calculation.

How Coverages B and C Erode the Limits

A frequently tested nuance is which limit each CGL coverage reduces:

Coverage C (Medical Payments) pays reasonable medical expense regardless of fault for bodily injury on the insured's premises or arising from operations, as a goodwill, fast-pay coverage that can head off larger liability claims. It requires the expense to be incurred and reported within one year of the accident and excludes the named insured, employees (covered by workers' comp), tenants, and athletic-event participants.

Coverage B Offenses and Their Exclusions

Coverage B is triggered by the commission of a listed offense, not by an occurrence, so timing keys to when the offense was committed. The seven offenses include false arrest/detention, malicious prosecution, wrongful eviction/entry, libel/slander, violation of privacy, use of another's advertising idea, and infringement of copyright/trade dress/slogan in an advertisement.

Coverage B carries its own exclusions the exam tests as gaps:

• Knowingly false statements
• Prior publication (material first published before the policy period)
• Criminal acts by or at the direction of the insured
• Offenses committed by an insured in the business of advertising, broadcasting, publishing, or telecasting (media businesses need a media liability policy)
• Breach of contract and failure of goods to conform to advertised quality

Because Coverage B erodes the General Aggregate, a large defamation defense can reduce the dollars left for bodily-injury claims later in the year.