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

Coverage B - Personal and Advertising Injury

Coverage B insures liability for personal and advertising injury arising out of the insured's business. Unlike Coverage A, the harm need not be a bodily injury or property damage and need not result from an accident - it arises from specifically enumerated offenses. The ISO CG 00 01 lists seven 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. The use of another's advertising idea in your advertisement
7. Infringing upon another's copyright, trade dress, or slogan in your advertisement

Trap: Patent and trademark infringement are NOT covered offenses under Coverage B - only copyright, trade dress, and slogan in your advertisement are listed. This is a perennial exam favorite.

Coverage B Limits and Exclusions

Coverage B carries its own limit, the Personal and Advertising Injury Limit (commonly $1,000,000 per person or organization), and it erodes the General Aggregate - not a separate aggregate. Like Coverage A, defense is paid in addition to the limit.

Key Coverage B exclusions to memorize:

• Injury caused by the insured with knowledge that the statement was false
• Oral or written publication first made before the policy period began
• Injury arising out of a criminal act committed by the insured
• Breach of contract (except an implied contract to use another's advertising idea)
• Injury arising from the failure of goods to conform to advertised quality

Trap: If the insured knew the published material was false, Coverage B does not apply. The offense must be a covered publication, but knowing falsity defeats it.

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. Its defining feature is that it pays regardless of fault - no legal liability of the insured is required. It is a goodwill, first-aid coverage designed to settle small injuries before they become liability suits.

Conditions for Coverage C:

• 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 examination by physicians the insurer chooses, at the insurer's expense, as often as reasonably required.

Covered expenses include first aid at the time of the accident, necessary medical, surgical, x-ray, and dental services, and ambulance, hospital, professional nursing, and funeral services.

Coverage C Limit and Excluded Persons

Coverage C has a low Medical Expense Limit - commonly $5,000 or $10,000 per person - and it erodes the Each Occurrence Limit and the General Aggregate. Because it is no-fault, any payment made under Coverage C for a person who later sues is credited against any Coverage A damages owed to that same person, preventing a double recovery.

Who is EXCLUDED from Coverage C:

Worked example: A customer trips in a store and incurs $4,200 of ER bills. Under a $5,000 Coverage C limit, the insurer pays the full $4,200 with no need to prove the store was negligent. If the customer later wins a $30,000 Coverage A judgment, the $4,200 already paid is subtracted, so Coverage A pays $25,800.

Comparing Coverage A, B, and C

Understanding how the three insuring agreements differ is a high-yield exam skill:

• Coverage A requires an occurrence (accident) producing bodily injury or property damage, and the insured must be legally liable.
• Coverage B requires a covered offense (not an accident) and likewise depends on legal liability for personal and advertising injury.
• Coverage C requires only an accident causing bodily injury on or near the premises or from operations and pays without regard to fault.

A single event can implicate more than one coverage. If a customer is hurt by a falling display, Coverage C can pay immediate medical bills (no-fault), and if the customer later sues and proves negligence, Coverage A responds to the damages - with the Coverage C payment credited against the Coverage A award.

Coverage B would not apply unless an enumerated offense such as defamation were involved. Watch for the way a fact pattern frames fault, the type of harm, and whether a publication or offense is present; those three cues route you to the correct coverage.

Coverage B Offenses — Reading the Closed List

Coverage B (Personal and Advertising Injury) is offense-triggered, not occurrence-triggered, so the question is whether the alleged wrong matches one of the enumerated offenses.

Memorize the list: false arrest, detention, or imprisonment; malicious prosecution; wrongful eviction, wrongful entry, or invasion of the right of private occupancy of a room or premises by or on behalf of the landlord/owner; oral or written publication that slanders or libels a person or organization or disparages goods/services; publication that violates a right of privacy; use of another's advertising idea in your advertisement; and infringing upon another's copyright, trade dress, or slogan in your advertisement. Patent and trademark infringement are not covered — a frequent distractor.

Coverage B Key Exclusions

Coverage B excludes injury caused by the insured with knowledge of falsity, material published before the policy period, criminal acts, contractual liability (with carve-outs), breach of contract (other than misappropriation of advertising ideas under an implied contract), quality/performance of goods (failure to conform to statements), wrong description of prices, and offenses by an insured in the business of advertising, broadcasting, publishing, or telecasting. The media-business exclusion is why ad agencies need a separate media/professional policy.

Coverage C Medical Payments — No-Fault Goodwill Coverage

Coverage C pays reasonable medical expenses for bodily injury to a third party caused by an accident on premises the insured owns or rents, or arising from the insured's operations, regardless of fault, if the expense is incurred and reported within a set time (commonly one year). Its purpose is to settle minor third-party injuries quickly and discourage liability suits — a customer who trips and needs stitches can be paid without a fault determination. The limit is per person and modest (often $5,000–$10,000).

Coverage C Excluded Persons

Coverage C does not pay for injury to: any insured (you cannot Med Pay yourself); an employee injured in the course of employment (workers comp); a person injured on a part of the premises normally occupied by a tenant; anyone eligible for workers compensation; a person taking part in athletics; injury included in the products-completed operations hazard; or injury due to war. When a stem describes an employee or the insured themselves, Coverage C is unavailable and the claim routes to workers comp or is denied.