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

Coverage B: Personal and Advertising Injury Liability

Coverage B is the CGL's second insuring agreement. Unlike Coverage A, it does not require bodily injury or property damage and is not triggered by an 'occurrence.' Instead, it responds to enumerated offenses committed in the course of the named insured's business. Coverage B pays damages the insured becomes legally obligated to pay because of 'personal and advertising injury,' and the insurer again has the right and duty to defend.

'Personal and advertising injury' is defined as injury, including consequential bodily injury, arising out of one or more of these specific offenses.

The Coverage B Offenses

Memorize the listed offenses; they appear repeatedly on the national exam:

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

Note: General patent and trademark infringement are not covered (only slogan/trade dress in your advertisement). This is a frequent trap.

Coverage B Limits and Exclusions

Coverage B is subject to its own Personal and Advertising Injury Limit (typically equal to the Each Occurrence Limit), and payments fall under the General Aggregate. There is no separate per-occurrence concept because coverage is offense-based.

Notable exclusions under Coverage B:

• Injury caused by the insured with knowledge that the act would violate rights and inflict injury (knowing falsehood).
• Material published with knowledge of its falsity (knowing defamation).
• Material first published before the policy period began.
• Criminal acts committed by or at the insured's direction.
• Breach of contract (except misappropriation of advertising ideas under an implied contract).
• Quality or performance of goods ('failure to conform to statements').
• Injury arising from the wrong description of the price of goods.
• Insureds in the media/advertising business (publishers, broadcasters, advertisers) for advertising offenses — they need media liability coverage.
• Electronic chatrooms or bulletin boards the insured hosts/controls, and unauthorized use of another's domain name/metatag.

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. Crucially, it is no-fault coverage — payment is made regardless of the insured's legal liability. This goodwill coverage aims to settle minor injuries quickly and discourage litigation.

For coverage to apply:

• The accident must take place in the coverage territory and during the policy period.
• Expenses must be incurred and reported within one year of the accident date.
• The injured person must submit to exams by physicians chosen by the insurer.

Med Pay covers first aid at the time of the accident, necessary medical, surgical, dental, ambulance, hospital, professional nursing, and funeral services.

Coverage C Limit and Worked Example

Coverage C has a Medical Expense Limit (Any One Person) — commonly $5,000 or $10,000 per person. Payments are also subject to the General Aggregate. Med Pay does not apply to the named insured, employees (workers' comp applies), tenants, or persons injured while taking part in athletics, and it does not apply where Coverage A's products-completed operations hazard applies.

Worked example: A customer slips in a store with a $5,000 Coverage C limit and $1,000,000 Coverage A limit. Minor treatment costs $1,800 and the customer accepts Med Pay without suing — the insurer pays $1,800 under Coverage C, no liability finding required. If instead the customer's bills total $9,000 and she sues, Med Pay pays up to $5,000; any amount the insured is legally liable for beyond that is paid under Coverage A, and Med Pay paid is typically credited against the Coverage A settlement to avoid double recovery.

How the Three Coverages Work Together

For the exam, picture a single bodily injury accident flowing through the CGL. First, Coverage C can pay the injured party's reasonable medical bills quickly with no admission of fault, up to the per-person limit. If the injured party sues and the insured is legally liable, Coverage A pays the damages (subject to the Each Occurrence and applicable aggregate). Coverage B would respond instead when the harm is an enumerated offense — defamation, false arrest, wrongful eviction — rather than physical injury.

Distinguish the triggers cleanly: Coverage A needs an occurrence (accident) causing BI/PD; Coverage B needs an offense causing personal/advertising injury; Coverage C needs an accident causing BI but no fault is required. Coverages B and Coverage C medical payments share the General Aggregate with Coverage A's non-products exposures, so heavy use of one erodes the pool available to the others.

Aggregate Interaction Worked Example

Assume a CGL with a $1,000,000 Each Occurrence Limit, $2,000,000 General Aggregate, $5,000 Med Pay limit, and a separate $2,000,000 Products-Completed Operations Aggregate. During the year the insured incurs: a $700,000 Coverage A premises judgment, a $400,000 Coverage B defamation settlement, and $5,000 in Coverage C medical payments. All three draw from the General Aggregate: $700,000 + $400,000 + $5,000 = $1,105,000, leaving $895,000 of General Aggregate. A later $1,000,000 products-liability loss draws from the separate Products-Completed Operations Aggregate and is unaffected by the premises/offense activity.

Understanding which losses share which aggregate is a recurring exam point.

Key Takeaways

• Coverage B is offense-based (not occurrence-based) and covers personal and advertising injury such as false arrest, malicious prosecution, wrongful eviction, defamation, invasion of privacy, and limited advertising offenses.
• General patent and trademark infringement are NOT covered by Coverage B; only slogan/trade dress/copyright in an advertisement.
• Coverage B excludes knowing violations, material published before the period, criminal acts, breach of contract, and media-business insureds.
• Coverage C Medical Payments is no-fault, paying regardless of liability, with a per-person limit (commonly $5,000/$10,000) and a one-year reporting window.
• Med Pay does not cover the named insured or employees and is credited against any Coverage A recovery.