Section 10.20 Coverage B—Personal and Advertising Injury Liability

• Library: Insurance Practice 2015

Personal and advertising injury coverage was formerly provided under a separate endorsement for which the insured paid an additional premium. The commercial general liability (CGL) policy form now automatically includes personal and advertising injury coverage.

While Coverage A of the CGL policy provides protection for liability for “bodily injury” and “property damage” caused by accident, Coverage B provides protection for liability for “personal and advertising injury” arising out of an offense. “Personal and advertising injury” means injury including consequential “bodily injury.” It should be noted that Exclusion o to Coverage A excludes coverage for “bodily injury” arising out of “personal and advertising injury.” Offenses under Coverage B include:

false arrest; malicious prosecution; wrongful eviction and wrongful entry; libel and slander; violation of the right of privacy; misappropriation of advertising ideas; and infringement of copyright, trade dress, or slogan.

Coverage for “personal and advertising injury” does not fall within the definition of “occurrence” and does not specifically exclude injury expected or intended by the insured. The covered offenses are such that they would not likely be caused by accident. They arise from intentional acts and, by their nature, cause some type of damage or at least inconvenience or embarrassment even though they may not necessarily give rise to an action for damages. The insurance applies to “personal and advertising injury” caused by an offense and arising out of the insured’s business.

The policy covers all damages for injury including consequential “bodily injury” arising out of the described offenses. These include economic damages as well as damages for “emotional distress.” Punitive damages, however, are not covered. In Schnuck Markets, Inc. v. Transamerica Insurance Co., 652 S.W.2d 206, 209 (Mo. App. E.D. 1983), the court said that “[p]unitive damages are not in the same category as damages ‘for bodily injury’ or ‘for personal injury.’”

Pipefitters Welfare Educational Fund v. Westchester Fire Insurance Co., 976 F.2d 1037 (7^th Cir. 1992), decided under Illinois law, involved a claim where the insured sold a transformer to a scrap dealer. When the transformer was cut open, it spilled a large quantity of polychlorinated biphenyls, resulting in property damage. The court held that the allegations of the complaint fell within the definition of “personal injury,” which provided coverage for “wrongful entry or eviction or other invasion of the right to private occupancy.” The court stated that the complaint alleged...