Bodily Injury/Personal Injury/Property Damage/Advertising Injury (BI/PI/PD/AI)

August 2, 2011

All D&O policies contain exclusions for loss associated with or arising out of claims that allege bodily injury and property damage. These exclusions focus on specific types of injury rather than a particular type of wrongful act. Most D&O policies also exclude some types of personal injury and/or advertising injury. An example of exclusion wording that excludes bodily injury, property damage, and certain personal injury offenses follows:

The Insurer shall not be liable to make any payment for Loss in connection with a Claim made against an Insured:

(f) for emotional distress or for injury from libel, slander, defamation, disparagement, or a violation of a person's right of privacy; …

(k) for bodily injury, sickness, disease, or death of any person, or damage to or destruction of any tangible property, including the loss of use thereof;

National Union 70320 (4/98)

Because D&O policies provide a form of errors-and-omissions-liability coverage, it is reasonable that the policy forms exclude claims based on bodily injury, property damage, and personal injury, all of which may be at least partially insured under commercial general, automobile, and umbrella liability policies.

The language used in D&O policies to exclude bodily injury, personal injury, property damage, and advertising injury rarely matches exactly the language that grants such coverage under the standard ISO CGL policy. Some D&O policies exclude an extensive list of injuries; others exclude only a handful. The following side-by-side comparison of the National Union exclusion shown previously and definitions contained in the 2007 version of the ISO CGL policy coverage grant illustrates this point.

 

 

Standard ISO-CGL Policy (CG 00 01 12 07)

National Union 70320 (4/98) Exclusion 4.(f) and 4.(k)

Bodily Injury Definition

Includes bodily injury, sickness, and disease, including resulting death.

Includes bodily injury, sickness, disease and death of any person.

Personal and Advertising Injury Definition

Injury, including consequential bodily injury arising out of one or more of the following offenses:

 

no definition

 

1.  False arrest, detention or imprisonment.

not excluded

 

 

2.  Malicious prosecution

 

not excluded

 

 

3.  Wrongful eviction, wrongful entry, invasion of the right of private occupancy

 

Injury from a violation of a person's right of privacy.

 

 

4.  Libel or slander, including disparagement of goods, products or services

 

excluded

 

 

5.  Oral or written publication of material that violates a person's right of privacy

 

excluded

 

 

6.  Use of another's ideas in the Insured's advertisement.

 

not excluded

 

 

7.  Copyright, title or slogan infringement

 

not excluded

Property Damage Definition

1.  Physical injury to tangible property. Includes resulting loss of use.

Damage to or destruction of tangible property, including loss of use thereof.

 

 

2.  Loss of use of tangible property not physically injured.

 

not excluded

 

D&O insurers may not necessarily intend to exclude exactly that which is covered by the CGL policy. In fact, there appears to be several potential overlaps in coverage. For example, the property damage exclusion in the National Union D&O policy noted previously closely matches the standard CGL insuring agreement as respects damage to or destruction of tangible property including loss of use thereof. However, the National Union exclusion is silent regarding loss of use of tangible property that is not physically injured, thereby creating a potential overlap of coverage with the CGL policy. Such overlaps in coverage also may exist with respect to certain types of personal and advertising injury.

Coverage under a D&O policy is generally broader than coverage under the standard CGL policy, especially if the CGL policy contains endorsements precluding coverage for claims based on personal and advertising injury (CG 21 38), abuse or molestation (CG 21 46) or employment-related practices (CG 21 47). Obviously, D&O coverage for any claim would be subject to other policy provisions and would have to be based on a wrongful act by an insured individual.

There are other notable characteristics of the wording of these exclusions. Consider these two examples:

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