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Section II – General Liability Coverages

Coverage B – Personal and Advertising Injury Liability 

CA 00 25

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II. General Liability Coverages

B. Personal and Advertising Injury Liability

            1. Coverage (Insuring Agreement)

            2. Exclusions

SECTION II – GENERAL LIABILITY COVERAGES

II. General Liability

The General Liability section of the Auto Dealers Coverage Form closely tracks the Commercial General Liability Coverage Form (04 13 edition). 

Actual Policy Language

Explanation

B. Personal and Advertising Injury Liability

B. Personal and Advertising Injury Liability

1. Coverage

We will pay all sums the "insured" legally must pay as damages because of "personal and advertising injury" to which this insurance applies, caused by an offense arising out of your "auto dealer operations", but only if the offense was committed in the coverage territory during the policy period.

We will have the right and duty to defend any "insured" against a "suit" asking for these damages. However, we have no duty to defend any "insured" against a "suit" seeking damages for "personal and advertising injury" to which this insurance does not apply. We may investigate and settle any claim or "suit" as we consider appropriate. But:

a. The amount we will pay for damages is limited as described in Paragraph F. Limits Of Insurance – General Liability Coverages; and

b. Our duty to defend or settle ends when the applicable limit of insurance has been exhausted by payment of judgments or settlements under Paragraph A. Bodily Injury And Property Damage Liability or Paragraph B. Personal And Advertising Injury Liability or medical expenses under Paragraph C. Locations And Operations Medical Payments.

No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Supplementary Payments.

 

1. Coverage

The insuring agreement for Coverage B is similar to that for Coverage A, except the damages must arise out of personal or advertising injury. The company is still obligated to defend the insured until judgment or settlement. The "offense" of personal or advertising injury must be committed within the policy period and the coverage territory.

The definitions of "advertisement" and "personal and advertising injury" clearly limit coverage for advertising liability to wrongful acts committed while advertising one's good or products to the public.

A separate limit of liability applies to Coverage B - see Limits of Insurance.

Endorsement CA 25 54 (Exclusion - Personal and Advertising Injury Liability Coverage) eliminates this coverage.

2. Exclusions

This insurance does not apply to: 

2. Exclusions

a. Knowing Violation Of Rights Of Another

"Personal and advertising injury" caused by or at the direction of the "insured" with the knowledge that the act would violate the rights of another and would inflict "personal and advertising injury".

b. Material Published With Knowledge Of Falsity

"Personal and advertising injury" arising out of oral or written publication of material, if done by or at the direction of the "insured" with knowledge of its falsity. 

a. and b. Intentional Acts

This is similar to the intentional injury exclusion in Coverage A. Although it might be said that all personal injuries are intentional (the statement was spoken or written), the intent of this exclusion is to avoid paying only those claims arising out of statements that the insured knew to be hurtful. As a practical matter, the company must defend the insured until it is clear that the insured knew he was lying - a difficult fact to prove.

The Texas Supreme Court interpreted this exclusion in a way that is detrimental to many policyholders. See the CGL technical report Personal and Advertising Injury Known Falsity Exclusion.

c. Material Published Prior To Policy Period

"Personal and advertising injury" arising out of oral or written publication of material whose first publication took place before the beginning of the policy period. 

c. No Stacking

Coverage is triggered by the date the offense was committed, but some offenses are committed over a period of time (such as advertising campaigns). This exclusion requires that the first publication take place during the policy period.

d. Criminal Acts

"Personal and advertising injury" arising out of a criminal act committed by or at the direction of the "insured".

d. Criminal Law Violations

This exclusion applies only if the violation was made with the consent of the insured against whom the claim is made.

e. Contractual

"Personal and advertising injury" for which the "insured" has assumed liability in a contract or agreement. This exclusion does not apply to liability for damages that the "insured" would have in the absence of the contract or agreement.

 

e. Contractual Liability

Contractual liability, where the responsibility for the personal or advertising injuries of another is assumed, is excluded.

For instance, the insured may hire a security service to patrol the premises after hours, and assume responsibility for personal injury claims that arise out of their actions, such as wrongful detention.

Endorsement CA 25 47 (Limited Contractual Liability Coverage for Personal and Advertising Injury) adds an exception to cover liability assumed in a contract designated in the endorsement.

f. Breach Of Contract

"Personal and advertising injury" arising out of a breach of contract, except an implied contract to use another's advertising idea in your "advertisement".

 

f. Breach of Contract

Failure to perform a contractual obligation, such as payment for advertising over several months, is excluded. Misappropriating someone else's advertising ideas may be construed as breach of an implied contract, but such offense in not excluded.

g. Quality Or Performance Of Goods -- Failure To Conform To Statements

"Personal and advertising injury" arising out of the failure of goods, products or services to conform with any statement of quality or performance made in your "advertisement".

g. Failure to Perform

There is no coverage for advertising injury claims that allege failure to provide the services advertised. 

h. Wrong Description Of Prices

"Personal and advertising injury" arising out of the wrong description of the price of goods, products or services stated in your "advertisement". 

h. Incorrect Price

A seller of goods who does not honor advertised prices cannot look to this policy for protection.

i. Infringement Of Copyright, Patent, Trademark Or Trade Secret

"Personal and advertising injury" arising out of the infringement of copyright, patent, trademark, trade secret or other intellectual property rights. Under this exclusion, such other intellectual property rights do not include the use of another's advertising idea in your "advertisement".

However, this exclusion does not apply to infringement, in your "advertisement", of copyright, trade dress or slogan.

i. Infringement   

This exclusion is intended to address previous court decisions that broadened the coverage beyond its intent.   It clarifies that infringement coverage only extends to those involving copyrights, trade dress or slogans in advertising.

j. Electronic Chat Rooms Or Bulletin Boards

"Personal and advertising injury" arising out of an electronic chat room or bulletin board the "insured" hosts, owns, or over which the "insured" exercises control.

j. Electronic Chatrooms or Bulletin Boards  

Chatrooms and bulletin boards present unique exposures to personal injury hazards, such as libel and slander.  Such exposures are better covered by a special cyber liability policy.

A “chatroom” is defined by Webster’s dictionary as an on-line interactive discussion group on the Internet.

A “bulletin board” is defined as a program that allows users to read and write public notices.

k. Unauthorized Use Of Another's Name Or Product

"Personal and advertising injury" arising out of the unauthorized use of another's name or product in your e-mail address, domain name or metatag, or any other similar tactics to mislead another's potential customers.

k. Unauthorized Use of Name or Product 

Accidental or coincidental use of a name or product without an intent to mislead would arguably not be excluded.

A “metatag” is a coding statement in Hypertext Markup Language (HTML) that describes some aspect of the contents of a Web page.  It permits search engines to index a page so that someone searching for the kind of information the page contains will be able to find it.

l. Pollution

"Personal and advertising injury" arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants" at any time.

m. Pollution-related

Any loss, cost or expense arising out of any:

(1) Request, demand, order or statutory or regulatory requirement that any "insured" or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of, "pollutants"; or

(2) Claim or "suit" by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of, "pollutants". 

l and m. Pollution  

These pollution exclusions exist under the personal injury coverage because of several court decisions granting pollution coverage for wrongful entry by pollutants into another's premises.

n. War

"Personal and advertising injury" arising, directly or indirectly, out of:

(1) War, including undeclared or civil war;

(2) Warlike action by a military force, including action in hindering or defending against an actual or expected attack, by any government, sovereign or other authority using military personnel or other agents; or

(3) Insurrection, rebellion, revolution, usurped power, or action taken by governmental authority in hindering or defending against any of these.

n. War

o. Recording And Distribution Of Material Or Information In Violation Of Law

"Personal and advertising injury" arising directly or indirectly out of any action or omission that violates or is alleged to violate:

(1) The Telephone Consumer Protection Act (TCPA), including any amendment of or addition to such law; or

(2) The CAN-SPAM Act of 2003, including any amendment of or addition to such law;


(3) The Fair Credit Reporting Act (FCRA), and any amendment of or addition to such law, including the Fair And Accurate Credit Transaction Act (FACTA); or

(4) Any federal, state or local statute, ordinance or regulation, other than the TCPA or CAN-SPAM Act of 2003 or FCRA and their amendments and additions, that addresses, prohibits or limits the printing, dissemination, disposal, collecting, recording, sending, transmitting, communicating or distribution of material or information.

o. Violation of Consumer Privacy Statutes

This exclusion makes it clear that no claim arising out of statutory violations of federal, state, or local consumer privacy laws will be covered by this policy.

p. Employment-related Practices

"Personal and advertising injury" to:

(1) A person arising out of any:

(a) Refusal to employ that person;

(b) Termination of that person's employment; or

(c) Employment-related practices, policies, acts or omissions, such as coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination or malicious prosecution directed at that person; or

(2) The spouse, child, parent, brother or sister of that person as a consequence of "personal and advertising injury" to that person at whom any of the employment-related practices described in Paragraph (1)(a), (b) or (c) above are directed.

This exclusion applies:

(a) Whether the injury-causing event described in Paragraph (1)(a), (b) or (c) above occurs before employment, during employment or after employment of that person;

(b) Whether the "insured" may be liable as an employer or in any other capacity; and

(c) To any obligation to share damages with or repay someone else who must pay damages because of the injury.

p. Employment-Related Practices

This precludes coverage for personal injury arising out of the insured’s employment practices.

q. Acts, Errors Or Omissions

"Personal and advertising injury" arising out of "acts, errors or omissions".

q. Acts, Errors or Omissions

Coverage for these types of losses are covered in Section III – Acts, Errors or Omissions Liability Coverages.