Understanding Personal Injury and Advertising Injury Coverage in Business Insurance

By Jenny Holly Hansen | WBN News | June 9, 2025

As a business owner, you wear many hats—and with each comes a certain degree of risk. Most owners are familiar with the basics of commercial general liability (CGL) insurance: it protects your business if someone slips and falls on your premises, or if property damage occurs because of your operations. But tucked within many general liability policies is a critical sub-coverage that often goes overlooked: Personal Injury and Advertising Injury Coverage.

Let’s take a closer look at what this coverage actually means, why it matters, and what it protects.

What Is Personal and Advertising Injury Coverage?

Under a typical CGL policy, Personal Injury and Advertising Injury is a separate insuring agreement designed to cover non-physical injuries—claims that don’t involve bodily harm or property damage, but can still result in significant financial loss for a business.

Think of it this way:

• Bodily Injury & Property Damage: Covers physical harm and physical damage.
• Personal & Advertising Injury: Covers reputational, emotional, or economic harm stemming from your business activities.

This coverage responds when your business is accused of causing harm through things like libel, slander, invasion of privacy, copyright infringement, or misleading advertising. In many cases, lawsuits in these areas can be just as costly—if not more so—than a standard slip-and-fall claim.

What Does Personal Injury Cover?

“Personal injury” in this context is not medical or bodily harm. Instead, it includes:

1. Libel and Slander:
   If your business (or an employee acting on its behalf) says or publishes something that defames a person or organization, resulting in reputational harm, this coverage may respond.
2. False Arrest, Detention, or Imprisonment:
   This can apply if your business wrongfully detains a customer or employee. Retail businesses, for example, sometimes face these allegations in shoplifting situations.
3. Malicious Prosecution:
   If your business initiates legal action that is later deemed baseless and malicious, this coverage may apply.
4. Wrongful Eviction or Entry:
   Particularly relevant for landlords or property managers, this protects against claims that you wrongfully evicted a tenant or invaded their privacy.
5. Invasion of Privacy:
   Accusations that your business improperly used personal information or violated someone’s right to privacy.

What Does Advertising Injury Cover?

“Advertising injury” is related to the content and messaging used to promote your business. It typically includes:

1. Copyright Infringement in Advertising:
   If you inadvertently use protected content—photos, graphics, slogans, or jingles—in your advertising or website, you could be sued for intellectual property infringement.
2. Trademark or Slogan Infringement:
   Using another company’s protected brand name or slogan without permission, even unintentionally, can result in a claim.
3. Misappropriation of Advertising Ideas or Style of Doing Business:
   If you’re accused of stealing a competitor’s ad concept or marketing approach, this coverage may respond.
4. Defamation in Advertising:
   If your advertising disparages another company, directly or indirectly, and they claim damage to reputation or business losses.

Real-World Examples

To make this more practical, here are some situations where personal and advertising injury coverage could protect a business:

• A fitness studio posts a testimonial video online. The person featured later claims they did not consent to the public use of their image (invasion of privacy).
• A restaurant’s social media post criticizes a competitor’s cleanliness standards. The competitor sues for defamation.
• A homebuilder uses a stock image in marketing materials that turns out to be under an exclusive license, leading to a copyright lawsuit.
• A retail store accuses a customer of shoplifting and detains them, only to discover the accusation was false.

Why Is This Coverage So Important?

In today’s digital, highly connected world, reputational claims are rising. Social media, online reviews, websites, blogs, and aggressive marketing strategies have dramatically increased exposure to personal and advertising injury claims.

Many business owners mistakenly believe that general liability only protects against physical harm, but overlooking personal and advertising injury coverage can leave you exposed to costly litigation. Even if claims are groundless, legal defense costs can quickly add up—and this coverage can help absorb those expenses.

Key Policy Limits and Exclusions

Like all insurance, personal and advertising injury coverage has limitations. It typically won’t cover:

• Deliberate or intentional wrongdoing.
• Knowing violation of rights.
• Breach of contract.
• Patent infringement (most CGL policies exclude patents entirely).
• Employment-related offenses (often covered under Employment Practices Liability Insurance instead).

It's also important to know that the limit for personal and advertising injury is usually shared with other liability limits under your CGL policy.

The Bottom Line

Personal and advertising injury coverage may not be the first thing that comes to mind when purchasing insurance, but it’s an essential safeguard in our litigious, reputation-sensitive business environment. As a business owner, understanding this sub-coverage—and making sure your policy includes it—can give you peace of mind that you're protected from a broader range of legal threats, not just the obvious ones.

Let’s Keep Talking:

Jenny is a business insurance broker with Waypoint Insurance. With 19 years experience, she will well versed in the technical aspects of business coverages.

She can be reached at 604-317-6755 or jholly-hansen@wbnn.news. Connect with Jenny on LinkedIn at https://www.linkedin.com/in/jenny-holly-hansen-365b691b/.  Connect with Jenny at BlueSky: https://bsky.app/profile/jennyhollyhansen.bsky.social

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