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

Coverage B: Personal and Advertising Injury

Coverage A handles physical harm; Coverage B handles harm that is reputational, communicative, or commercial. Personal and advertising injury does not require bodily injury or property damage. Instead the policy covers a closed list of named offenses, so memorizing them is essential for the exam.

Coverage B pays sums the insured is legally obligated to pay as damages, and like Coverage A it includes a duty to defend with defense costs paid outside the limit until that limit is exhausted.

The Seven Named Offenses

The defined offenses, paraphrased, are:

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 the person occupies.
4. Oral or written publication that slanders or libels (defamation).
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 on another's copyright, trade dress, or slogan in your advertisement.

If an offense is not on this list, Coverage B does not respond.

Coverage B Limits and Exclusions

Coverage B carries a separate Personal and Advertising Injury Limit, which is the most paid for all such injury sustained by any one person or organization. This limit is subject to the General Aggregate Limit.

Key exclusions: injury caused by the insured knowing the statement was false, injury from material published before the policy began, injury arising from a criminal act, breach of contract (except misappropriation of advertising ideas in a contract), and offenses by insureds in the business of advertising, broadcasting, or publishing.

Coverage C: Medical Payments

Medical payments (Med Pay) under Coverage C is a goodwill coverage. It pays reasonable medical expenses for bodily injury caused by an accident on premises the insured owns or rents, or arising from the insured's operations, regardless of fault.

Because it is no-fault and paid quickly, Med Pay reduces friction and can head off larger liability suits. The Medical Expense Limit is a per-person sublimit, commonly $5,000 or $10,000, and it is subject to the Each Occurrence Limit.

How Coverage C Differs from Coverage A

Medical expenses must be incurred and reported within a set time, traditionally one year of the accident date. Coverage C does not pay the insured's own injuries, injuries to employees (workers comp territory), tenants, or those eligible for workers compensation benefits.

Common Exam Trap

Candidates confuse Coverage B with Coverage A because both can involve a lawsuit. Remember: Coverage A requires physical bodily injury or property damage from an occurrence; Coverage B covers non-physical offenses such as libel or wrongful eviction. A defamation suit with no physical harm is Coverage B, not A.

Another trap: Med Pay (Coverage C) erodes the Each Occurrence Limit shared with Coverage A, so a large Med Pay payout reduces the funds available for a liability judgment in the same occurrence.

Personal Injury vs Advertising Injury

The defined term combines two historically separate grants. Personal injury offenses arise from the insured's general conduct: false arrest, malicious prosecution, wrongful eviction, defamation, and invasion of privacy. Advertising injury offenses arise specifically from the insured's advertisement: using another's advertising idea, or infringing copyright, trade dress, or slogan in an ad.

The distinction matters because the advertising offenses apply only when the harm flows from the insured's own advertising. A defamatory remark made in a private business meeting is a personal-injury offense, not an advertising one.

Coverage C Conditions and Time Limits

For Med Pay to respond, several conditions must be met:

• The accident takes place in the coverage territory and during the policy period.
• The expenses are incurred and reported to the insurer within one year of the accident date.
• The injured person submits to examination by physicians the insurer chooses, at the insurer's expense, as often as reasonably required.
• The person authorizes release of medical records.

Covered expenses include first aid at the time of the accident, necessary medical, surgical, X-ray, and dental services, ambulance, hospital, professional nursing, and funeral expenses. Because Coverage C is goodwill coverage, payment does not constitute an admission of liability by the insured.

Worked Limit Interaction Example

A visitor trips at an insured's office. The insured carries an Each Occurrence Limit of $1,000,000 and a Med Pay limit of $5,000 per person.

The insurer pays the visitor's $5,000 in medical bills under Coverage C without any finding of fault. The visitor then sues, and a $300,000 liability judgment follows under Coverage A. Because Coverage C shares the Each Occurrence Limit, the combined Coverage A and C payout for this single occurrence is $305,000, well within the $1,000,000 cap. Had a single occurrence threatened to exceed the limit, the early Med Pay payout would reduce the funds left for the liability judgment.

Coverage B Exclusions in Practice

Several Coverage B exclusions appear regularly on exams. Coverage B does not apply to injury the insured caused with knowledge that the statement was false, nor to prior publication of material whose first publication preceded the policy period.

It also excludes offenses committed by an insured in the business of advertising, broadcasting, publishing, or telecasting, and infringement of patent or trademark (note: trade dress and slogan are covered, but patents and general trademarks are not). Quality, performance, or pricing errors in goods described in an ad are likewise excluded.