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

Coverage B: Personal and Advertising Injury

Coverage B in CG 00 01 insures liability for personal and advertising injury caused by an enumerated offense arising out of the insured's business. Unlike Coverage A, Coverage B does not require bodily injury or an occurrence/accident - it responds to intentional business torts so long as they fall within the listed offenses. The defined term combines two older coverages ("personal injury" and "advertising injury") into one.

The seven enumerated offenses are the entire universe of Coverage B; nothing outside the list is covered:

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 upon another's copyright, trade dress, or slogan in your advertisement

Coverage B Limit and Key Exclusions

Coverage B has its own Personal and Advertising Injury Limit (commonly $1,000,000), separate from the Each Occurrence Limit but still subject to the General Aggregate. Notable exclusions a candidate must recognize:

• Knowing violation of another's rights (the insured knew the act would injure)
• Material published with knowledge of falsity (deliberate lies)
• Material first published before the policy period (a prior-publication bar)
• Breach of contract, except an implied contract to use another's advertising idea
• Infringement of patent or trademark - notably patent and trademark are NOT covered; only copyright, trade dress, and slogan are.

The patent/trademark exclusion is one of the most tested Coverage B traps: a business sued for trademark infringement finds no Coverage B, while a slogan or copyright suit may be covered.

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 is that it is paid without regard to legal liability - it is a goodwill, no-fault coverage meant to settle minor injuries quickly and head off larger lawsuits.

Key mechanics that show up on the exam:

• Expenses must be incurred and reported within one year of the accident date.
• Coverage C has its own Medical Expense Limit, typically $5,000 per person, and payments erode the Each Occurrence Limit and the General Aggregate.
• Med Pay does not apply to the named insured, employees (covered by workers comp), tenants, or those injured by the insured's products/completed operations.

If Coverage A ends up paying damages for the same injury, any Med Pay already advanced is credited so the claimant is not paid twice. Because Med Pay settles small claims fast and without an admission of fault, insurers view it as litigation avoidance rather than a true liability promise.

Worked Numeric: Med Pay and Aggregate Erosion

Suppose a customer trips on the insured's sidewalk and incurs $4,200 in ER bills with no lawsuit. Under a CGL with a $5,000 Med Expense Limit, Coverage C pays the full $4,200 with no liability finding required. That $4,200 reduces the Each Occurrence Limit and the General Aggregate for the term.

Now assume the same customer later sues and wins $60,000 in damages. Coverage A pays the $60,000 (subject to limits), but the insurer credits the $4,200 already advanced under Med Pay so the total outlay for that one injury is $60,000, not $64,200. Recognizing this offset - and that Med Pay is paid regardless of fault while Coverage A requires legal liability - separates a passing answer from a distractor.

Coverage C Is No-Fault, Coverage B Requires an Offense

Coverage C (Medical Payments) pays reasonable medical expenses for bodily injury to a member of the public on or near the insured's premises or from the insured's operations, regardless of fault, if the expense is incurred and reported within a set window (commonly one year). It is a goodwill, suit-avoidance coverage and does not apply to the insured, employees (workers' comp), tenants, or anyone injured by the insured's products away from the premises.

How Coverage B Differs From a Negligence Claim

Coverage B responds only to the listed offenses (libel, slander, disparagement, wrongful eviction, false arrest, privacy violation, advertising-idea/copyright/trade-dress infringement). It is not triggered by ordinary negligence and excludes knowing/intentional false statements, breach of contract, and patent/trademark infringement.

Limit-Erosion Recap

Coverage C payments reduce the each-occurrence and general-aggregate limits, so a year of small Med Pay claims can quietly shrink the protection available for a later large liability suit.

Why the Limit Interactions Matter

The exam pairs Coverage B and Coverage C because both have their own limits yet still erode the general aggregate, which produces non-obvious results. A year of small medical-payments claims, each paid without regard to fault to discourage litigation, quietly shrinks the aggregate available for a later large liability suit, so a producer advising a client must watch the aggregate, not just the per-occurrence limit. Coverage B's separate personal-and-advertising-injury limit means a defamation or advertising-idea claim does not compete with a bodily-injury claim for the each-occurrence limit, but it does reduce the same general aggregate.

Keeping these erosion paths straight lets you answer the common stem that asks how much protection remains after a sequence of mixed claims, and it reinforces why the products-completed operations aggregate is deliberately kept separate so that product claims cannot exhaust the limit needed for premises accidents.