A technology startup is developing a new mobile application. They are concerned about potential lawsuits arising from claims of privacy breaches, defamation in their app's user-generated content, or unintentional infringement of another company's advertising slogan. Which type of liability insurance would best cover these risks?
- AProfessional Liability (E&O)
- BCommercial General Liability (CGL)
- CCyber Liability
- DPersonal and Advertising Injury Coverage (Part of CGL)
Show answer & explanationAnswer & explanation
Correct answer: D. Personal and Advertising Injury Coverage (Part of CGL)
Claims of defamation and unintentional advertising infringement (like slogan misuse) are specifically covered under Coverage B - Personal and Advertising Injury of the Commercial General Liability (CGL) policy. While privacy breaches might have elements of Cyber Liability, the specific mention of defamation and advertising infringement points directly to CGL Coverage B.
Why the other options are wrong
- A. Professional Liability (E&O) covers errors or omissions in professional services, not defamation or advertising infringement.
- B. While CGL is the overarching policy, 'Personal and Advertising Injury' is a distinct part (Coverage B) that directly addresses these non-physical harms.
- C. Cyber Liability covers data breaches, network security failures, and related digital risks, but defamation and advertising infringement are specifically CGL B perils.
CGL Coverage B - Personal & Advertising Injury
Coverage B of the Commercial General Liability (CGL) policy provides coverage for legal liability arising from 'personal injury' (e.g., false arrest, wrongful eviction, libel, slander) and 'advertising injury' (e.g., copyright infringement in advertising, misappropriation of advertising ideas).
- Covers non-physical harms.
- Includes libel, slander, false arrest, malicious prosecution.
- Covers copyright infringement in advertising, misappropriation of advertising ideas.
Memory trick: CGL's Coverage B: Bad-Mouth, Bad-Branding, Bad-Behavior.