All actions detailed in the definition of “Personal and Advertising Injury,” as contained in Insurance Services Office’s (ISO’s) commercial general liability (CGL) policy, are intentional acts or “offenses.” While the actions leading to charges of libel, slander, invasion of privacy, copyright infringement, false arrest, defamation and other “offenses” defined in this section are intentional, the results must be unintentional before this coverage part responds to defend and/or pay the defined third-party injury.
“Personal and Advertising Injury” coverage – Coverage B – is wholly separate from the “Bodily Injury and Property Damage” protection extended by Coverage A; but Coverage B is fully contained within the package of CGL-provided coverage. This translates to mean that all other CGL policy sections apply equally to Coverage A and Coverage B.
However, the “personal and advertising injury” coverage part is largely ignored by agents. Rarely are these coverages highlighted or any risk management steps taken to help the insured avoid these types of losses. Every insured has a “personal and advertising injury” exposure even though it’s not as easy to spot or explain as the bodily injury and property damage exposure. Coverage A and Coverage B are compared and contrasted in the next several paragraphs.
Coverage Trigger Differences
Although Coverage A and Coverage B are equal in weight (if not importance), different actions or events trigger coverage. Coverage A is triggered by an “occurrence” and pays only if the bodily injury or property damage “occurs” during the policy period. Coverage B is triggered by an “offense,” responding only when a listed offense takes place during the policy period. While these provisions may sound alike, there are legal issues that create a divergence in the application of the policy language.
The definition of “occurrence” can vary from state to state and injury type to injury type. Because of these differences, several policy years may be considered before being narrowed down to the correct policy or policies – usually with the help of the court. Once the date of “occurrence” is decided, the policy in effect on that date is triggered. (The four theories of “occurrence” were detailed in the post: “The Difference Between ‘Occurrence’ and ‘Claims Made’ Liability Coverage Forms.”)
“Offense,” in contrast, is NOT a specifically defined terms; its meaning is inferred from the definition of “personal and advertising injury.” Coverage B listed offenses are generally definite in time, with the possible exception of published materials. The policy in effect when the “offense” takes place responds to the claim.
With published material, many courts and the policy wording appears to place the date of the offense as the date of FIRST publication. Problems arise if the FIRST publication of a claim-inducing oral or written ad, article or broadcast takes place prior to the existence of any CGL policy, even if the supposed injury didn’t arise until there was a policy in force (more specific detail is contained in the next post).
Claims Made Form Differences: The above coverage trigger conversation assumes coverage written on an “occurrence basis.” When written on an “occurrence” form, the insured is subject only to any applicable statute of limitations or repose in regard to “personal and advertising injury” coverage. If the offense took place during the policy period, that policy responds regardless of when the claim is brought. However, if the insured is written on a “claims made” form, the offense must additionally be committed after the listed retroactive date (if any). (See “Moving Between Occurrence and Claims Made Liability Forms.”)
Differences in the Breadth of Coverage
Liability protection provided by both coverage parts is created, or rather limited, by definition. Coverage A – Bodily Injury and Property Damage is subject to four main definitions (there are others); and Coverage B – Personal and Advertising Injury is subject to two main terms (among others). Definitions usually serve to confine the breadth of coverage to that desired by the carrier. Four definitions versus two would seem to indicate that Coverage B is the less restricted coverage part, but this is not the case.
The number of definitions does not determine the breadth of coverage, the length and specificity of the applicable definitions do. Coverage A’s four main coverage limiting/specifying definitions are: “bodily injury,” “property damage,” “occurrence” and “products-completed operations.” Coverage B extends coverage based mainly on the definitions of “personal and advertising injury” and “advertisement.” (Both coverage parts share terms such as “suit,” “pollution” and “coverage territory.”)
Two of Coverage A’s four primary definitions are limited to one sentence: “occurrence” and “bodily injury.” “Property damage” is an expansive definition providing coverage with only one limiting sentence (a definition within the definition). Only the “products-completed operations’” definition grants coverage then uses the definition to limit the protection. The first three coverage-providing definitions are essentially limited only by the specific Coverage A exclusions; the last (“products-completed operations”) contains its own exclusions in addition to the listed coverage part exclusions.
Coverage B (“Personal and Advertising Injury”), unlike Coverage A, is functionally equivalent to a “named peril” property policy; that is, unless the peril (in this case, offense) causing the loss is specifically named/listed in the definition, there is no coverage. An earlier paragraph noted that an “offense,” the act that triggers coverage, is not a defined term and must take its lead from the definition that shares its name with this coverage part. “Personal and advertising injury” is defined as:
a. False arrest, detention or imprisonment;
b. Malicious prosecution;
c. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor;
d. Oral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products or services;
e. Oral or written publication, in any manner, of material that violates a person’s right of privacy;
f. The use of another’s advertising idea in your “advertisement”; or
g. Infringing upon another’s copyright, trade dress or slogan in your “advertisement.”
If the insured commits an offense that is not found in the definition, there is no coverage. And just like named peril property coverage, it is up to the insured to prove the offense is covered by the definition. If the offense is within the definition, then the insured must hope that none of the 16 specific coverage part exclusions apply.
“Personal and advertising injury” coverage’s breadth is much narrower than the coverage provided by “bodily injury and property damage” Coverage A, as detailed above.
The last section of this post merely listed the offenses covered under the “personal and advertising injury” section. The next post will provide examples of each of these listed offenses.