8.4 Bodily Injury, Property Damage, and Personal/Advertising Injury

The CGL (CG 00 01) pays under three insuring agreements, and each is triggered by a precisely defined type of harm. The exam loves to test which coverage and which limit applies, because the definitions are narrower than everyday English.

The Three Insuring Agreements

Defined Terms You Must Memorize

• Bodily injury (BI): bodily injury, sickness, or disease, including death resulting from it. Note that purely mental/emotional distress without physical harm is often excluded unless tied to bodily injury.
• Property damage (PD): (1) physical injury to tangible property, including resulting loss of use; and (2) loss of use of tangible property that is not physically injured. Data and money are generally not tangible property.
• Occurrence: an accident, including continuous or repeated exposure to substantially the same harmful conditions.

A recurring trap: a contractor's faulty workmanship that merely fails to perform is usually not an 'occurrence' and not covered PD — but if the defective work damages other property, that resulting damage can be covered.

Coverage B — Personal and Advertising Injury

Unlike Coverage A, Coverage B is triggered by an offense, not an accident, and the offenses are a closed list. Memorize them:

• False arrest, detention, or imprisonment
• Malicious prosecution
• Wrongful eviction, wrongful entry, or invasion of the right of private occupancy
• Oral or written publication of material that slanders or libels (defamation) or violates a right of privacy
• Use of another's advertising idea in your advertisement
• Infringing on copyright, trade dress, or slogan in your advertisement

Note that patent infringement and trademark infringement (general) are not in the list — a classic distractor. Knowing libel/slander and right-of-privacy are in but patent is out wins exam points.

CGL Limit Structure

The CGL carries six limits, and matching a claim to the right limit is high-yield:

Worked example: Limits are $1,000,000 each occurrence / $2,000,000 general aggregate / $2,000,000 products-completed aggregate. A products-liability injury draws against the products-completed aggregate, not the general aggregate — so two separate $2,000,000 buckets are available. An insured who exhausts the general aggregate on premises claims still has the full products aggregate intact.

How the Each-Occurrence Limit Caps Combined BI and PD

Unlike split auto limits (8.2's 100/300/100), the CGL each-occurrence limit is a single pool covering BI and PD together for one event — closer to a combined single limit. If a single accident causes $700,000 of bodily injury and $500,000 of property damage against a $1,000,000 each-occurrence limit, the insurer pays $1,000,000 total, not $1,200,000, and the insured owes the remaining $200,000 (where an umbrella would respond).

Coverage C — Medical Payments (No-Fault Goodwill)

Coverage C pays without regard to fault for medical expenses of others injured on the insured's premises or by its operations, within a short window (commonly 1 year) and up to a small per-person sublimit (commonly $5,000). It is goodwill coverage designed to settle minor injuries quickly and head off larger Coverage A negligence suits. It does not pay the insured's own injuries or those of employees (workers comp handles employees).

Common Definition Traps to Drill

• Loss of use of undamaged property is property damage — a contractor who blocks a store's entrance can owe for the store's lost business even without touching the building.
• Electronic data and money are not tangible property, so corrupting a client's data is not PD under the unendorsed CGL (cyber forms address it).
• Your product / your work damaged by its own defect is usually excluded (business-risk exclusions), but resulting damage to other property is covered.
• Mental anguish counts as bodily injury only when tied to physical injury, in most forms.

The disciplined approach on exam day: identify the type of harm (BI, PD, or a Coverage B offense), confirm it fits the defined term, choose the insuring agreement, then apply the correct limit or aggregate. Most CGL questions are won or lost on these definitions, not on arithmetic.