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

Coverage B: Personal and Advertising Injury Liability

Coverage B (Section I, Coverage B of CG 00 01 04 13) is fundamentally different from Coverage A. It does not require bodily injury, property damage, or an occurrence/accident. Instead it responds to a closed list of intentional offenses the insured commits in the course of business. Like Coverage A, it includes a duty to defend.

Personal and advertising injury means injury, including consequential BI, arising out of one or more of these seven enumerated offenses:

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

Coverage B Triggers, Limits, and Key Exclusions

Because Coverage B has no occurrence requirement, the trigger is simply that the offense is committed during the policy period in the coverage territory. The Personal & Advertising Injury limit is a per person or organization limit (commonly $1,000,000) and erodes the General Aggregate.

The exam loves the Coverage B exclusions - they carve out offenses the insured should have known were wrong:

Trap: Patent infringement is NOT a Coverage B offense - only copyright, trade dress, and slogan infringement in your advertisement is covered.

Note how the advertisement definition limits the last two offenses: only the use of another's advertising idea, or infringement on copyright/trade dress/slogan, that occurs in the insured's advertisement triggers coverage. "Advertisement" means a notice broadcast or published to the general public or specific market segments about goods, products, or services. The first five offenses (false arrest, malicious prosecution, wrongful eviction, libel/slander, and invasion of privacy) do not require an advertisement at all - they are ordinary business-conduct offenses.

Distinguishing the Five Personal Offenses from the Two Advertising Offenses

A reliable way to keep the seven offenses straight is to split them into two families. The first five - false arrest, malicious prosecution, wrongful eviction/entry, libel/slander, and invasion of privacy - are personal injury offenses that arise out of how the business treats people and can occur with no advertising at all. A landlord who illegally locks out a tenant, a security guard who detains a shopper without cause, or a manager who circulates a defamatory memo all trigger this family.

The last two - using another's advertising idea and infringing on copyright, trade dress, or slogan - are advertising injury offenses that, by definition, must occur in the insured's advertisement. Exam questions often test the boundary: a defamatory statement made privately is personal injury, but the same statement published in a marketing brochure may implicate both halves. Either way, all seven share one limit, the Personal & Advertising Injury limit, and the same defense obligation.

Coverage C: Medical Payments

Coverage C pays reasonable medical expenses for bodily injury caused by an accident on the insured's premises, on ways next to the premises, or arising out of the insured's operations - regardless of fault (no negligence need be proven). It is a goodwill, no-fault coverage designed to settle minor injuries quickly and head off larger liability suits.

Key mechanics:

• Expenses must be incurred and reported within one year of the accident.
• Covers first aid at the time of the accident, plus necessary medical, surgical, dental, ambulance, hospital, professional nursing, and funeral expenses.
• The Medical Expense limit is a per person limit (commonly $5,000 or $10,000) and erodes the Each Occurrence and General Aggregate limits.
• No duty to defend attaches to Coverage C - it simply pays expenses.

Why do insurers offer a no-fault medical coverage at all? Coverage C is a loss-prevention tool. By quickly paying a slip-and-fall victim's $800 emergency-room bill without a fault fight, the insurer often satisfies the claimant before an attorney is retained, heading off a far larger Coverage A negligence suit. Because it pays regardless of fault, the insured does not need to admit liability, and an offer of medical payments is not treated as an admission of negligence.

Coverage C Exclusions and a Worked Numeric

Coverage C does not pay medical expenses for:

• Any insured (other than a volunteer worker in some forms) or an employee injured in employment (that is workers compensation territory).
• A person injured while practicing or competing in athletics.
• A person whose injury is covered by products-completed operations.
• Injury arising out of the Coverage A excluded war or similar perils.

Worked numeric: A customer slips in a store. Coverage C limit is $10,000 per person; Each Occurrence is $1,000,000. The store pays a $4,000 Coverage C payment with no fault dispute. The customer later sues for negligence and is awarded $250,000 in BI damages under Coverage A. The insurer pays both - but the $4,000 already paid under Coverage C counts toward the $1,000,000 Each Occurrence limit, so the most remaining for that occurrence is $996,000. The total $254,000 is well within limits, so the insurer pays it all.