Introduction to Coverage B
In the world of the Commercial General Liability (CGL) policy, most students focus heavily on Coverage A, which deals with tangible harm—bodily injury and property damage. However, for the Texas General Lines Exam, understanding Coverage B: Personal and Advertising Injury is equally critical. This coverage protects businesses from liabilities arising out of non-physical offenses committed in the course of business operations.
Unlike Coverage A, which is triggered by an 'occurrence' (an accident), Coverage B is triggered by specific 'offenses.' These offenses are defined within the policy and typically relate to the reputation, privacy, and intellectual property rights of others. For a comprehensive overview of how this fits into the broader policy, refer to our complete TX General exam guide.
Coverage A vs. Coverage B: Key Differences
| Feature | Coverage A (BI & PD) | Coverage B (P&AI) |
|---|---|---|
| Nature of Injury | Physical (Bodily Injury/Property Damage) | Non-Physical (Reputational/Financial) |
| Trigger | Occurrence (Accident) | Offense (Specific Act) |
| Key Examples | Slip and fall, fire damage to premises | Libel, slander, copyright infringement |
| Territory | Coverage Territory (US, Canada, PR) | Coverage Territory (Usually Global for ads) |
Defining Personal and Advertising Injury Offenses
To succeed on your exam, you must memorize the specific offenses that fall under Coverage B. The policy defines 'personal and advertising injury' as injury, including consequential bodily injury, arising out of one or more of the following offenses:
- False Arrest, Detention, or Imprisonment: Restricting someone's freedom without legal authority.
- Malicious Prosecution: Initiating legal action against someone without probable cause and with malice.
- Wrongful Eviction: The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling, or premises.
- Libel and Slander: Oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products, or services.
- Violation of Privacy: Oral or written publication of material that violates a person's right of privacy.
- Copyright/Trade Dress Infringement: The use of another's advertising idea in your 'advertisement' or infringing upon another's copyright, trade dress, or slogan in your 'advertisement'.
Candidates should practice identifying these scenarios by reviewing practice TX General questions.
Exam Tip: The 'In Your Advertisement' Requirement
For offenses like copyright infringement or trade dress violations, the offense must occur in the insured's 'advertisement.' If a business steals a design for their product (not the ad), that is generally a patent or trade secret issue, which is excluded from Coverage B.
Common Exclusions Under Coverage B
Just as important as what is covered is what is excluded. The CGL policy contains several specific exclusions for Coverage B to prevent businesses from insuring against predictable or intentional bad behavior. Key exclusions include:
- Knowing Violation of Rights: If the insured committed the act knowing it would violate another's rights and inflict injury, coverage is denied.
- Material Published with Knowledge of Falsity: Coverage does not apply to libel or slander if the insured knew the statement was false before publishing it.
- Contractual Liability: Liability assumed in a contract is generally excluded, unless the insured would have been liable anyway without the contract.
- Breach of Contract: Failure to perform the terms of a contract is not an 'advertising injury.'
- Quality or Performance of Goods: False advertising regarding how well a product works is excluded.
- Wrong Description of Prices: Mistakes in price tags or advertised prices are not covered.
- Infotainment and Media Businesses: Businesses in the business of advertising, broadcasting, or publishing have much more restrictive coverage and usually require specialized Media Liability policies.
Quick Facts for Test Day
Frequently Asked Questions
Yes, but only if the bodily injury is 'consequential.' This means the physical harm must result directly from one of the covered offenses, such as a person suffering a heart attack due to a false arrest.
No. Patent infringement and theft of trade secrets are specifically excluded from Coverage B. These risks require specialized Intellectual Property insurance.
Coverage B usually has a Personal and Advertising Injury Limit, which is the most the insurer will pay for all claims made by one person or organization. This limit is also subject to the policy's General Aggregate Limit.
Standard CGL policies exclude many electronic data and internet-related risks for companies that are 'in the business' of providing internet services. Most modern businesses have some coverage, but those specializing in digital media often need Cyber Liability or Media Professional Liability.