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

The CGL Coverage Structure

The ISO Commercial General Liability Coverage Form (CG 00 01) organizes liability protection into three insuring agreements, each with its own limit:

• Coverage A — Bodily Injury and Property Damage Liability
• Coverage B — Personal and Advertising Injury Liability
• Coverage C — Medical Payments (no-fault, small limit, no liability required)

The exam tests the precise definitions of each injury type, because the wrong category means the wrong coverage part — and sometimes no coverage at all.

Bodily injury (BI) means bodily injury, sickness, or disease, including resulting death. Note that the standard CGL definition of BI does not automatically include mental anguish or emotional distress unless it stems from a physical injury — a tested distinction.

Property damage (PD) means physical injury to tangible property, including loss of use, or loss of use of tangible property that is not physically injured. The second prong matters: if a contractor's error shuts down a neighboring store, the loss of use of the undamaged store is still property damage even though nothing was physically broken. Tangible property does not include electronic data under the standard form, so a pure data breach is addressed by cyber, not the CGL.

Coverage A also excludes the insured's own work and own product (the "business risk" or your-work/your-product exclusions). Liability insurance funds harm to others, not the cost of redoing the insured's defective workmanship — that is a business cost, not an insurable fortuity. This is why faulty construction claims so often fall outside the CGL.

Personal and Advertising Injury (Coverage B)

Unlike Coverage A, Coverage B does not require bodily injury or property damage — it responds to specified offenses. Memorize the seven enumerated offenses:

1. False arrest, detention, or imprisonment
2. Malicious prosecution
3. Wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room or premises
4. Oral or written publication that slanders or libels a person or organization (defamation)
5. 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: ordinary patent and trademark infringement are excluded from Coverage B (only copyright, trade dress, and slogan in your advertisement are covered).

CGL Limits and the Aggregate Worked Example

The CGL declarations show several limits that interact:

Worked example. A contractor's CGL has a $1,000,000 Each Occurrence limit and a $2,000,000 General Aggregate. Three unrelated Coverage A losses occur: $700,000, $900,000, and $800,000 = $2,400,000 total. The first two pay in full ($1,600,000), but only $400,000 of the aggregate remains, so the third loss is paid $400,000 (not $800,000). The insured absorbs the remaining $400,000. Once the general aggregate is exhausted, the policy pays nothing more for the rest of the term.

Two refinements matter on the exam. First, products-completed-operations losses draw on a separate aggregate, so exhausting the general aggregate does not automatically wipe out products coverage. Second, the standard CGL aggregate applies per policy period, not per location or per project — unless an Amendment of Limits of Insurance (Designated Project) or per-location endorsement (CG 25 03 / CG 25 04) is added, which a contractor with multiple jobs should request.

Coverage C Medical Payments is paid on a no-fault basis (typically a $5,000 per-person sublimit) and erodes the general aggregate, but it does not require the insured to be legally liable, making it a goodwill-preserving "early pay" coverage that can head off larger Coverage A suits.

The Three Injury Definitions in CGL

Commercial liability turns on which injury definition applies; each has its own coverage part:

Coverage A of the CGL handles BI and PD; Coverage B handles Personal and Advertising Injury; Coverage C handles Medical Payments.

Personal & Advertising Injury Offenses

The named P&AI offenses are a closed list the exam tests: false arrest/detention/imprisonment; malicious prosecution; wrongful eviction/entry/invasion of privacy; oral or written publication that slanders/libels or disparages; violation of privacy; use of another's advertising idea; and infringing on copyright, trade dress, or slogan in your advertisement.

Loss of Use as Property Damage

A subtle, tested point: loss of use of tangible property that is not physically injured still qualifies as property damage. If a contractor's error shuts down a client's factory for a week, the loss of use is covered PD even though nothing was physically broken.

Worked Example

A retailer's social-media ad copies a competitor's slogan and falsely claims the competitor's products are defective. The competitor sues for disparagement and slogan infringement. These are Personal & Advertising Injury offenses under Coverage B, not BI or PD - so Coverage A would not respond, but Coverage B would defend and indemnify within its limit. If a customer had instead been physically hurt by a falling display, that would be Coverage A bodily injury. Matching the harm to the correct CGL coverage part (A vs. B vs. C) is a core exam skill.