8.4 Bodily Injury, Property Damage, and Personal/Advertising Injury
Key Takeaways
- Bodily injury (BI) means physical harm: bodily injury, sickness, or disease, including death that results.
- 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 ISO CGL splits coverage: Coverage A pays BI and PD; Coverage B pays personal and advertising injury; Coverage C pays medical payments on a no-fault basis.
- Personal and advertising injury covers named OFFENSES (libel, slander, false arrest, wrongful eviction, malicious prosecution, copyright infringement in an ad) not physical harm.
- Split limits show three numbers (e.g., 100/300/50: per-person BI / per-accident BI / PD); a combined single limit (CSL) is one amount for BI and PD combined.
Bodily Injury and Property Damage Defined
Liability forms pay only for defined categories of harm. The two cornerstones are bodily injury and property damage.
Bodily Injury (BI)
Bodily injury means bodily injury, sickness, or disease sustained by a person, including death that results at any time. It is physical harm to a human being.
Property Damage (PD)
Property damage means:
- Physical injury to tangible property, including resulting loss of use; or
- Loss of use of tangible property that is not physically injured.
Trap: PD applies to tangible property. Purely economic loss or damage to intangible data is generally not PD under standard forms. Loss of use even without physical injury (e.g., a blocked driveway preventing access) still counts.
| Term | Covers | Key Limit |
|---|---|---|
| Bodily injury | Physical harm, sickness, death | Per person / per occurrence |
| Property damage | Tangible property injury or loss of use | Per occurrence |
The ISO CGL Coverage Structure
The ISO Commercial General Liability (CGL) form CG 00 01 organizes liability into three insuring agreements.
| Coverage | Pays For | Fault Required? |
|---|---|---|
| Coverage A | Bodily injury and property damage | Yes (legal liability) |
| Coverage B | Personal and advertising injury | Yes (an offense) |
| Coverage C | Medical payments | NO (no-fault, goodwill) |
Personal and Advertising Injury (Coverage B)
Personal and advertising injury is injury arising from a list of named offenses, not from physical harm. The ISO offenses include:
- False arrest, detention, or imprisonment
- Malicious prosecution
- Wrongful eviction or wrongful entry / invasion of the right of private occupancy
- Libel, slander, or defamation of a person or organization
- Oral or written publication that violates a person's right of privacy
- Use of another's advertising idea, or copyright/trade dress/slogan infringement in an advertisement
Coverage C: Medical Payments
Medical payments pays small medical bills for third parties hurt on the premises or by operations regardless of fault, as a goodwill, suit-avoiding feature. It does not require the insured to be legally liable.
A business is sued for slander after an employee publicly made a false, damaging statement about a competitor. Under the ISO CGL, this is most likely covered by:
Split Limits vs. Combined Single Limit
Liability limits are written two ways, and the math is heavily tested in auto and commercial scenarios.
Split Limits
Split limits show three numbers, for example 100/300/50 (in thousands):
- $100,000 maximum BI per person
- $300,000 maximum BI per accident (all people)
- $50,000 maximum property damage per accident
Worked example (100/300/50): An at-fault driver injures three people with claims of $90,000, $120,000, and $40,000, plus $30,000 in PD.
| Claim | Amount | Policy Pays |
|---|---|---|
| Person 1 BI | $90,000 | $90,000 (under $100K cap) |
| Person 2 BI | $120,000 | $100,000 (per-person cap) |
| Person 3 BI | $40,000 | $40,000 |
| BI subtotal | $230,000 | $230,000 (under $300K) |
| Property damage | $30,000 | $30,000 (under $50K) |
The insured personally owes the $20,000 excess on Person 2.
Combined Single Limit (CSL)
A combined single limit is one amount available for BI and PD combined per accident. A $300,000 CSL could pay any mix — e.g., $250,000 BI and $50,000 PD — up to $300,000 total, giving more flexibility than split limits.
Exam takeaway: With split limits, apply the per-person cap first, then the per-accident cap, then PD separately. With a CSL, only the single total applies.
Under a 100/300/50 split-limit auto policy, one injured person has a $130,000 bodily injury claim from a covered at-fault accident. How much does the policy pay toward that person's claim?
Personal Injury vs. Bodily Injury - A Frequent Trap
The exam repeatedly tests the difference between these two terms because they sound alike but cover opposite things.
| Term | What It Is | Where Covered |
|---|---|---|
| Bodily injury | Physical harm - injury, sickness, disease, death | CGL Coverage A; auto/HO liability |
| Personal injury (offenses) | Non-physical offenses - libel, slander, false arrest, wrongful eviction, invasion of privacy | CGL Coverage B; umbrella drop-down |
Standard auto and homeowners forms cover bodily injury and property damage but typically exclude the personal injury offenses. A personal umbrella can drop down to cover those offenses, subject to its self-insured retention.
Scenario: A homeowner is sued for spreading a damaging rumor (slander). The homeowners policy likely will not respond because slander is a personal injury offense, not bodily injury - but a CGL Coverage B or an umbrella could.
How the Damage Definitions Drive Exclusions
The definitions decide what is not covered as much as what is. Because PD is limited to tangible property, the CGL famously does not treat lost electronic data alone as property damage, which is why cyber policies exist. Because BI is physical harm, emotional distress unaccompanied by physical injury can fall outside Coverage A in many forms and instead implicate Coverage B offenses.
Putting Limits Together
When solving a limits question:
- Identify whether limits are split (three numbers) or a CSL (one number).
- For split limits, apply the per-person BI cap first, then the per-accident BI cap, then the PD limit separately.
- For a CSL, pour all BI and PD into one bucket and stop at the single total.
- Remember defense is usually outside the limit on personal lines and may be inside the limit on professional lines.
Exam takeaway: Match the harm to the coverage - physical harm to Coverage A (BI/PD), named offenses to Coverage B (personal and advertising injury), and small no-fault third-party bills to Coverage C (medical payments) - then apply split-limit or CSL math correctly.