CGL Coverage B Exclusions

CGL Coverage B insures certain “personal and advertising injury” offenses under its own insuring agreement, subject to exclusions, limits, and the policy’s definitions. A claim alleging libel, slander, wrongful eviction, or an advertising-related offense may appear to fit at first glance, but Coverage B is not general media liability. The contract enumerates covered offense categories and excludes important conduct, publication, contractual, intellectual-property, and business-practice claims. The precise policy edition and endorsements control.

Coverage B differs from Coverage A. Coverage A addresses bodily injury and property damage liability, while Coverage B addresses specified offenses that cause personal and advertising injury. The claimant’s label does not decide which insuring agreement applies. Identify the alleged offense, who committed it, how it arose, when it occurred, and whether the definitions and exclusions fit. A complaint that combines bodily injury, reputational harm, and a contract dispute may require separate analysis for each theory.

Start with the Coverage B grant

A representative ISO CGL form defines personal and advertising injury through a limited list of offenses, such as false arrest or detention, malicious prosecution, wrongful eviction or entry, oral or written publication that libels or slanders a person or disparages an organization’s goods or services, privacy violations through publication, and specified uses of another’s advertising idea or slogan. The list is form-specific and has changed across editions. A broad allegation of “reputational damage” is not enough; map the facts to a listed offense and definition.

The Coverage B grant also contains a connection to the insured’s business, a policy-period requirement, and the coverage territory. A business may face a claim for an online post written before the policy began but republished during the period, or for a statement that was first made during the period and repeated later. Prior-publication and related-claim wording can affect which period responds. The exact definition of an offense and reporting condition must be read with the exclusions.

The duty to defend and duty to pay damages are related but distinct. A policy may require a defense of a suit alleging covered injury, subject to the insurer’s rights and policy limits. Coverage B has its own limit structure and may share an aggregate with other coverages. Defense costs may be outside or within limits depending on the form. A finding that an exclusion removes one theory does not automatically decide every other allegation in a mixed complaint.

The key Coverage B exclusions

A standard ISO form contains exclusions that commonly include knowing violation of another’s rights, publication with knowledge of falsity, material published before the policy period, criminal acts, contractual liability, breach of contract, failure of goods or services to conform to advertised statements, wrong price descriptions, infringement of copyright, patent, trademark or trade secret, unauthorized use of another’s name or product in an email address, domain name, or metatag, and certain insureds in advertising, publishing, broadcasting, or internet-content businesses. Editions and endorsements differ.

Knowing violation of rights focuses on intentional conduct with knowledge that the act violates another’s rights and causes injury. It is not necessarily identical to a complaint alleging intentional conduct; the exclusion’s wording and facts matter. A false statement knowingly published can trigger a different exclusion. A company may argue that an employee acted within instructions, while the insured may contend the employee lacked the required knowledge. Resolve no issue by relying only on the complaint’s label.

The prior-publication exclusion addresses material first published before the policy period. It matters in claims-made and occurrence contexts because a continuing online page or repeated statement can have a publication history that predates renewal. If the same post is updated, copied, or shared, the insurer may examine whether it is a new publication or continuation of the earlier one under the form. Do not presume a new policy year creates a fresh covered offense.

The criminal-act and contractual-liability exclusions address different concerns. A criminal-act exclusion may apply to personal and advertising injury arising from criminal conduct. A contract exclusion generally concerns damages liability the insured assumed by contract, though the standard form contains language preserving liability that would exist without the agreement. A contract may also contain indemnity obligations that are not equivalent to the policy’s coverage grant. Read each provision rather than treating all intentional or contractual conduct as one exclusion.

Breach of contract and failure-to-conform exclusions distinguish coverage for certain publication offenses from a warranty that a product or service performs as promised. If a company advertises “guaranteed delivery by Friday” and misses the deadline, the resulting contract or performance dispute is not automatically Coverage B. An exception for an implied contract to use an advertising idea may appear in a representative form. That limited exception does not convert ordinary contract damages into insured advertising injury.

Intellectual-property exclusions can sharply limit coverage. Copyright, patent, trademark, trade-secret, and other intellectual-property rights do not all receive identical treatment in every edition. Some policies contain a narrow exception for specified infringement in an advertisement; its definition of advertisement and applicable conditions are critical. A trade-name dispute, software-code allegation, product-design claim, or use of a competitor’s image may involve rights outside the exception. Consider dedicated media or intellectual-property coverage when that exposure matters.

The advertising, publishing, broadcasting, or internet-content exclusion can apply to insureds whose primary business creates or distributes content for others. A retailer that posts its own promotional material may differ from a publisher or digital platform whose central business is content. The precise insured-business and activity wording controls. A company may have more than one business operation, so verify which entity and activity the exclusion addresses.

Connect the allegation to the exclusion

Analyze each alleged offense in sequence: (1) identify the insured and the claimant; (2) identify the alleged injury and offense; (3) compare that offense with the definition; (4) check policy period and territory; (5) test each relevant exclusion and exception; and (6) review defense, limits, notice, and other insurance. A single marketing campaign may generate a defamation count, copyright count, contract count, and consumer-protection count. One could satisfy the offense list while another is barred or falls outside the grant.

Suppose a business uses a competitor’s photograph in a social-media advertisement without permission. The allegations may involve an advertisement and intellectual-property rights, but a copyright exclusion could apply unless a specific form exception restores limited coverage. If the company copied the image from an earlier page that existed before inception, a prior-publication exclusion could also be considered. The title “advertising injury” does not automatically cover every advertising dispute.

Suppose a manager knowingly posts an untrue accusation about a former supplier. The claimant alleges libel and lost sales. Potential issues include whether the statement falls within the offense definition, whether the insured knew it was false, whether it was first published before the policy period, whether it arose from a contract dispute, and whether the damages are covered. Evidence may include drafts, emails, publication records, correction notices, contracts, and who authorized the post.

Coverage B examples

Coverage B is not a substitute for other policies

Commercial auto liability, professional liability, cyber liability, media liability, employment practices liability, and standalone intellectual-property policies address different exposures. A privacy breach involving exposed customer records may fall outside standard Coverage B or be restricted by privacy and data exclusions. A designer’s negligent failure to obtain image rights can raise professional-liability questions. A product-advertising dispute may involve both contract and IP theories. Coordinate policies and notice promptly; do not wait for a CGL coverage decision before notifying another potentially relevant insurer.

A CGL policy’s Coverage B can be materially narrowed by endorsements. Review exclusions for electronic data, access or disclosure of personal information, invasion of privacy, biometric information, intellectual property, contractual liability, or particular industries. Endorsements may alter definitions, remove an exception, or change who qualifies as an insured. The declarations alone do not reveal all restrictions; obtain the complete policy and current endorsements.

Exam method and common traps

• Coverage B addresses enumerated personal and advertising injury offenses, not every reputational or advertising loss.
• An allegation can fit the offense definition and still be excluded. Analyze grant and exclusions separately.
• Knowledge-of-falsity, prior-publication, criminal-act, contract, breach-of-contract, and IP exclusions address different facts.
• Coverage A bodily injury/property damage does not become Coverage B just because an advertisement is involved.
• A narrow advertising exception in an IP exclusion does not provide broad copyright or trademark insurance.
• The insured’s business can matter for exclusions directed at media, advertising, publishing, or internet-content operations.
• Defense and indemnity have different questions; limits and defense-cost treatment depend on the form.
• A new renewal period does not necessarily reset a prior-publication issue.
• Endorsements can materially amend a standard form; the declarations page is not the full contract.
• If facts are mixed, analyze each insured, offense, publication, and legal theory independently.

Classify allegations before applying an exclusion

Coverage B analysis starts by identifying the offense alleged, the claimant, the person said to have committed it, and the connection to the insured’s business. The offense title alone does not answer coverage. For example, a claimant may use the word “defamation,” but the form’s personal-and-advertising-injury definition, publication requirement, insured status, and exclusions still have to be considered. A claim may allege several offenses; analyze each relevant allegation under the policy language.

An advertising injury allegation also requires care. A dispute about the insured’s own advertisement may implicate a listed advertising offense, while a patent or trade-secret dispute about the product itself may fall within intellectual-property exclusions. The timing and method of the offense can matter: some forms address publication during the policy period, and an earlier campaign can raise prior-publication or knowledge questions. Do not treat every marketing dispute as Coverage B.

The employment-related practices exclusion can be especially important. A complaint by an employee may allege humiliation, discrimination, or invasion of privacy—words that resemble Coverage B offenses—but the exclusion may remove injury connected with employment practices. An EPLI policy may be the more relevant contract, subject to its own definitions and exclusions. Similarly, an insured-vs-insured or knowing-violation exclusion may turn on the parties and intent, not merely the offense label.

Suppose a restaurant publishes a social-media post using a competitor’s photograph and slogan. Coverage analysis would ask whether the claim alleges an offense included in Coverage B, whether the insured’s conduct occurred in the course of advertising, whether an exclusion for intellectual-property rights applies, and whether the insured knew the material would violate another’s rights. Compare the claim allegations with each clause; do not jump directly from “advertising” to “covered.”

Finally, distinguish defense from indemnity. A complaint may allege both covered and uncovered offenses. The duty to defend is generally assessed under the policy’s applicable rules and allegations; the duty to pay a settlement or judgment depends on the facts and coverage. The precise Texas rule and contract wording govern. The insurer may defend subject to a reservation while facts develop, and a final outcome can differ from the initial defense decision.

Coverage B is easiest to analyze when the alleged offense is separated from the exclusions that may remove it. Sitonce’s Texas Property and Casualty exam prep course reviews CGL coverages and policy-form questions.