Illinois Casualty Insurance State Practice Exam

What type of liability does Coverage B of a CGL Policy address?

1. Medical expenses arising from accidents

2. Liability due to bodily injury on the premises

3. Liability for personal injury such as slander and false arrest

4. Contractual liabilities for insured agreements

The correct answer is: Liability for personal injury such as slander and false arrest

Coverage B of a Commercial General Liability (CGL) policy specifically addresses liability for personal and advertising injuries. This includes types of offenses such as slander, libel, false arrest, and invasion of privacy. These personal injury claims arise from actions that harm an individual's reputation or cause emotional distress rather than physical injuries or accidents. To elaborate, personal injuries often involve non-physical harm that can lead to financial losses, making this coverage essential for businesses that may engage in advertising or public relations activities that could unintentionally defame someone or violate their rights. This focus on personal injury differentiates Coverage B from other sections of the CGL policy, which handle different types of liabilities. In contrast, other options relate to different types of coverage within an insurance policy, such as medical expenses (which falls under Coverage A for bodily injury) or contractual liabilities, which are not addressed by a CGL policy since they operate under a separate framework.