California Property & Casualty Broker-AgentCasualty InsuranceMedium
A California business client is purchasing a Commercial General Liability (CGL) policy. They are particularly concerned about liability arising from false advertising claims made against their business by a competitor. Which CGL coverage part would primarily address this type of claim?
- ACoverage C - Medical Payments
- BCoverage B - Personal and Advertising Injury Liability
- CCoverage D - Damage to Premises Rented to You
- DCoverage A - Bodily Injury and Property Damage Liability
Show answer & explanationAnswer & explanation
Correct answer: B. Coverage B - Personal and Advertising Injury Liability
Coverage B in a CGL policy specifically addresses 'Personal and Advertising Injury.' This includes offenses such as false arrest, libel, slander, copyright infringement, and, critically, 'misappropriation of advertising ideas or style of doing business' or 'infringement of copyright, trade dress or slogan in your advertisement.' False advertising claims fall under this category.
Why the other options are wrong
- A. Coverage C provides medical payments for injuries sustained on the insured's premises, regardless of fault.
- C. Coverage D is a specific property damage coverage for premises rented to the insured, not advertising claims.
- D. Coverage A deals with bodily injury and property damage, not intangible harms like false advertising.
CGL Coverage B: Personal and Advertising Injury
A section of the Commercial General Liability policy that covers liability for specific 'personal and advertising injury' offenses, such as libel, slander, false arrest, and certain advertising-related torts.
- Covers non-physical injuries, often related to reputation or intellectual property.
- Includes offenses like false advertising, copyright infringement, and malicious prosecution.
- Distinct from bodily injury and property damage liability.
Memory trick: A-BI/PD, B-P&AI, C-MedPay, D-RentedPrem - Know your ABCs!