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

Coverage B: Personal and Advertising Injury Liability

Coverage A is built on the occurrence trigger, so intentional torts would normally fall outside it. Coverage B fills that gap. It pays sums the insured becomes legally obligated to pay as damages because of personal and advertising injury caused by an offense arising out of the insured's business. There is no occurrence requirement and no bodily injury requirement — the trigger is the commission of a listed offense.

The Seven Enumerated Offenses

The CG 00 01 04 13 defines "personal and advertising injury" as injury arising out of one or more of these 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 of material that slanders or libels a person or organization
5. Oral or written publication of material 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

Exam trap: ordinary patent and trademark infringement are excluded — only copyright, trade dress, and slogan in your advertisement are covered.

Coverage B Limits and Key Exclusions

Coverage B has its own Personal and Advertising Injury Limit (typically equal to the Each Occurrence limit, e.g., $1,000,000), and it is capped by and erodes the General Aggregate. The insurer also has the duty to defend Coverage B suits, with defense outside the limits.

Major Coverage B exclusions to memorize:

• Knowing violation of another's rights / material published with knowledge of its falsity
• Material first published before the policy period began
• Criminal acts committed by or at the direction of the insured
• Breach of contract (except an implied contract to use another's advertising idea)
• Quality or performance of goods ("failure to conform to statements")
• Unauthorized use of another's name or product in your domain name (cyber/electronic chatroom exclusions)

Coverage C: Medical Payments

Coverage C 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 — regardless of fault. It is no-fault: the injured person need not prove the insured was negligent. This is goodwill coverage designed to settle small claims before they become liability suits.

Time and Limit Rules

• The accident must occur during the policy period.
• Expenses are paid only if incurred and reported within one year of the accident.
• Payment is capped by the Medical Expense Limit (Any One Person) sub-limit, commonly $5,000 or $10,000.
• Coverage C payments are part of the Each Occurrence limit — they reduce the amount available for a Coverage A judgment for the same occurrence.

Who Coverage C Excludes

Coverage C does not pay medical expenses for: any insured; a person hired to do work for the insured; an employee (workers' comp applies); persons injured while taking part in athletics; a tenant to the extent the injury occurs on that part of the premises rented to the tenant; or anyone where the injury is covered under the products-completed operations hazard.

If the insurer pays a Coverage C medical bill and the same injured party later wins a Coverage A judgment, the Coverage C amount is not refunded but is counted within the Each Occurrence limit, as shown in the worked example below. Coverage C is therefore a small, fast-pay goodwill benefit — its purpose is to keep minor injuries from escalating into litigated liability claims.

Aggregate Interplay (Putting B and C Together)

Note the asymmetry tested on exams: Coverage B erodes the General Aggregate, but Coverage A products-completed operations losses erode their own separate aggregate. Coverage C, by contrast, does not have its own aggregate — it is bounded by the per-person Medical Expense sub-limit and is absorbed into the Each Occurrence limit for the matching occurrence.

Worked Example - Same Occurrence, Two Coverages

A customer slips on the insured's wet floor. Coverage C pays the $5,000 emergency-room bill on a no-fault basis without any admission of negligence. The customer later sues and is awarded $300,000 in damages under Coverage A. Because both payments arise from the same occurrence, the $5,000 already paid is part of the $1,000,000 Each Occurrence limit.

The insurer's remaining Each Occurrence exposure for that occurrence is therefore $995,000, and it pays the full $300,000 judgment from within that. Total paid for the occurrence is $305,000, all charged against the single Each Occurrence limit. The exam point: Coverage C is not an extra layer stacked on top of Coverage A — it shares the same per-occurrence ceiling, so a large Coverage C payment can theoretically reduce the dollars available for a related liability judgment.