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

The Two Insuring Agreements of the CGL

The ISO CGL CG 00 01 organizes liability coverage into lettered coverages. The exam concentrates on Coverage A (Bodily Injury and Property Damage) and Coverage B (Personal and Advertising Injury), each with its own limit and its own definitions.

Coverage A — Bodily Injury and Property Damage Liability

• Bodily injury (BI): physical injury, sickness, or disease, including resulting death. Note: the ISO definition is physical — pure mental anguish without physical injury may not qualify.
• Property damage (PD): physical injury to tangible property (including loss of use) or loss of use of tangible property not physically injured. Data/electronic information is generally not tangible property.
• Triggered by an occurrence = an accident, including continuous or repeated exposure to substantially the same harmful conditions.

Coverage B — Personal and Advertising Injury

Covers specified offenses (not accidents), including:

• False arrest, detention, or imprisonment
• Malicious prosecution
• Wrongful eviction or invasion of privacy
• Libel, slander, or disparagement
• Copyright/slogan infringement in the insured's advertisement

These intentional-tort offenses are carved back into coverage even though general intentional acts are excluded.

CGL Limits Structure

The CGL uses several limits that interact. Understanding how they stack is frequently tested.

Worked Example — Limits Erosion

A business carries: Each Occurrence $1,000,000, General Aggregate $2,000,000, Products-Completed Operations Aggregate $2,000,000.

Two separate premises slip-and-fall claims settle at $700,000 and $900,000.

• Each is within the $1M per-occurrence limit.
• Combined $1,600,000 erodes the General Aggregate, leaving $400,000 for the rest of the policy year.
• A later product-injury claim draws on the separate Products-Completed Operations Aggregate ($2,000,000) — it does not share the depleted general aggregate.

Traps to Avoid

• Loss of use of undamaged tangible property still counts as property damage.
• Electronic data is excluded from PD unless endorsed.
• Medical payments are paid without regard to fault and erode the general aggregate.
• Coverage B responds to offenses, not occurrences — there is no "accident" requirement.

Defining the Injuries the CGL Pays For

The CGL responds to three injury categories, each precisely defined:

• Bodily injury (BI) — physical injury, sickness, or disease, including death resulting from it. Pure emotional distress without physical manifestation may fall outside BI unless the form is broadened.
• Property damage (PD) — physical injury to tangible property (including resulting loss of use) or loss of use of tangible property that is not physically injured. Economic loss alone, and damage to electronic data (not tangible), are generally not PD.
• Personal and advertising injury (PAI) — a closed list of offenses: false arrest/detention, malicious prosecution, wrongful eviction, slander/libel, violation of privacy, use of another's advertising idea, and infringement of copyright, trade dress, or slogan in your advertisement. PAI is offense-based, not occurrence-based.

A stem describing reputational harm from a defamatory ad is PAI (Coverage B), while a customer's broken leg in the store is BI (Coverage A) — matching the harm to the right coverage is the scored skill.

The "Occurrence" Definition and Expected/Intended

Coverage A applies to BI/PD caused by an occurrence — defined as an accident, including continuous or repeated exposure to substantially the same harmful conditions. The expected or intended injury exclusion removes deliberate harm (with a carve-back for reasonable force to protect persons or property). This pairing — occurrence requires accident, intentional harm is excluded — frames most Coverage A questions.

Worked Example — Limits Erosion Across Coverages

A CGL has a $1,000,000 each-occurrence limit and a $2,000,000 general aggregate. Coverage A pays $700,000 for one accident and later $600,000 for another; Coverage B pays $400,000 for a defamation claim.

• Each-occurrence cap is respected ($700k and $600k each ≤ $1M).
• General aggregate drains: $700k + $600k + $400k = $1,700,000 used, leaving $300,000 of general aggregate.
• A third BI/PD claim now has only $300,000 available even though the per-occurrence limit is $1,000,000, because the aggregate caps the year.

This shows the per-occurrence limit refills per event but the aggregate is the true annual ceiling — the central CGL limits lesson carried into the dedicated limits section.

Loss of Use and the Definition of "Property Damage"

The PD definition has two prongs the exam separates: physical injury to tangible property, including the resulting loss of use, and loss of use of tangible property that is not physically injured. The second prong matters — a contractor who negligently shuts off power to a neighboring store causes loss of use (lost business) even though nothing was physically broken. Recognizing loss-of-use as covered PD, while pure economic loss (a bad investment, lost profit unconnected to property) is not PD, is a frequently tested line.

Knowing-Violation and First-Publication Limits on Coverage B

Coverage B's offenses are narrowed by two timing/intent rules: there is no coverage for publication the insured knew was false, and no coverage for material whose first publication predated the policy period. So a defamatory statement first published before coverage incepted is excluded even if repeated during the term. Pairing the offense list with these intent and timing limits resolves most Coverage B questions, and distinguishing PAI offenses from the BI/PD of Coverage A is the broader skill.