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

The Three Insuring Agreements of the CGL

The ISO Commercial General Liability form CG 00 01 is built from three distinct Coverages, each with its own insuring agreement and its own limit:

• Coverage A — Bodily Injury and Property Damage Liability
• Coverage B — Personal and Advertising Injury Liability
• Coverage C — Medical Payments

The exam expects you to match the right injury type to the right coverage, because the definitions are exclusive — a libel claim is not bodily injury and is paid only under Coverage B.

Bodily Injury (BI)

Bodily injury is defined in CG 00 01 as bodily injury, sickness, or disease sustained by a person, including death resulting from any of these at any time. Note three points the exam tests:

1. It requires physical harm to a person — pure emotional distress without physical manifestation is often disputed and may not qualify under the base form.
2. It includes death as a resulting consequence.
3. Care, custody and emotional-only scenarios are scrutinized. BI is paid under Coverage A, subject to the Each Occurrence limit.

Property Damage (PD)

Property damage means: (a) physical injury to tangible property, including resulting loss of use; and (b) loss of use of tangible property that is not physically injured. The phrase "tangible property" is critical — the CGL specifically states that electronic data is not tangible property, so corrupted data alone is generally not PD (a key reason cyber policies exist).

Example of (b): A contractor blocks a store's only entrance for a week without damaging anything. The store's loss of use of its undamaged premises is property damage even though nothing was physically harmed.

Distinguishing the Three CGL Injury Concepts

The CGL covers three distinct harm categories, and the exam tests whether you can route a fact pattern to the right one. Bodily injury (BI) is physical injury, sickness, disease, or death — including resulting mental anguish in most editions. Property damage (PD) is physical injury to tangible property (including loss of use) — pure economic loss and data are generally not "tangible." Personal and advertising injury is a list of non-physical offenses such as false arrest, malicious prosecution, wrongful eviction, libel, slander, and copyright infringement in advertising.

The recurring trap is that defective work itself is not "property damage" (the "your work" exclusion), and professional errors are excluded — those exposures need products-completed operations analysis or a separate errors and omissions policy.

Products-Completed Operations and the Aggregate Split

A frequent extension of the BI/PD analysis is the products-completed operations hazard: bodily injury or property damage arising away from the insured's premises out of the insured's product or completed work. The CGL tracks this exposure under a separate aggregate limit from the general aggregate, so a manufacturer's product claims do not exhaust the limit available for premises and operations claims.

A worked illustration: a bakery's contaminated product sickens customers months after sale and off premises — this is a products-completed operations claim, charged against that special aggregate, not the general aggregate that would respond to a customer slipping in the store. Recognizing which aggregate a loss erodes, and that the your-product/your-work exclusions still bar the cost of replacing the defective item itself, is exactly how the exam separates a covered third-party injury from an uncovered business-risk repair.

Coverage A Limits and How They Interact

Coverage A is subject to two limits that the exam loves to combine:

• Each Occurrence limit — the most paid for BI and PD arising from any one occurrence.
• General Aggregate limit — the most paid in total during the policy period for Coverage A (other than products-completed operations) plus Coverage B and C.

Worked example: A policy carries a $1,000,000 Each Occurrence limit and a $2,000,000 General Aggregate. Three separate covered occurrences result in losses of $800,000, $1,200,000, and $600,000.

• Occurrence 1: $800,000 paid in full (under $1M).
• Occurrence 2: capped at the $1,000,000 Each Occurrence limit (insured absorbs $200,000).
• Running total paid = $800,000 + $1,000,000 = $1,800,000.
• Occurrence 3: only $200,000 of the aggregate remains, so the insurer pays $200,000 of the $600,000 loss.

Total insurer payment = $2,000,000; the General Aggregate is exhausted.

Personal and Advertising Injury (Coverage B)

Coverage B responds to a closed list of offenses, not to physical harm. The defined "personal and advertising injury" offenses include:

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

These are essentially intentional-type offenses that are nonetheless covered because they are business torts, not bodily harm. Coverage B has its own limit separate from the Each Occurrence limit but still erodes the General Aggregate.

Coverage C — Medical Payments

Coverage C (Medical Payments) pays reasonable medical expenses for bodily injury to others caused by an accident on the insured's premises or operations, regardless of fault, usually within one year of the accident and up to a small sub-limit (e.g., $5,000 or $10,000 per person). It is a goodwill/no-fault coverage designed to settle minor injuries before they become liability claims. It does not apply to the insured, the insured's employees (workers comp territory), or tenants.