This insurance does not apply to:

a. Expected Or Intended Injury

"Bodily injury" or "property damage" expected or intended from the standpoint of the insured. This exclusion does not apply to "bodily injury" resulting from the use of reasonable force to protect persons or property.

b. Contractual Liability

"Bodily injury" or "property damage" for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages:

(1) That the insured would have in the absence of the contract or agreement; or

(2) Assumed in a contract or agreement that is an "insured contract", provided the "bodily injury" or "property damage" occurs subsequent to the execution of the contract or agreement. Solely for the purposes of liability assumed in an "insured contract", reasonable attorneys' fees and necessary litigation expenses incurred by or for a party other than an insured are deemed to be damages because of "bodily injury" or "property damage", provided:

(a) Liability to such party for, or for the cost of, that party's defense has also been assumed in the same "insured contract"; and

(b) Such attorney fees and litigation expenses are for defense of that party against a civil or alternative dispute resolution proceeding in which damages to which this insurance applies are alleged.

c. Liquor Liability

"Bodily injury" or "property damage" for which any insured may be held liable by reason of:

(1) Causing or contributing to the intoxication of any person;

(2) The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or

(3) Any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages.

This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in:

(a) The supervision, hiring, employment, training or monitoring of others by that insured; or

(b) Providing or failing to provide transportation with respect to any person that may be under the influence of alcohol;

if the "occurrence" which caused the "bodily injury" or "property damage", involved that which is described in Paragraph (1), (2) or (3) above.

However, this exclusion applies only if you are in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages. For the purposes of this exclusion, permitting a person to bring alcoholic beverages on your premises, for consumption on your premises, whether or not a fee is charged or a license is required for such activity, is not by itself considered the business of selling, serving or furnishing alcoholic beverages.

Analysis

In the 08 24 edition, ISO has revised the language pertaining to such claims of negligence or other wrongdoing for consistency with similar language used in ISO's Commercial General Liability program. Specifically, the words "against any insured" have been added to the sentence,"This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in: ...".This same change has been made in the Professional Services exclusion, and the Aircraft, Auto or Watercraft exclusion.

Similar to the CGL form, the liability section of the Businessowners form encompasses certain contractual liability exposures, as well as liability the insured would have had if no contract existed. This is exception (1) to exclusion b. Exception (2) states that if the insured has assumed the liability of another but would be liable for bodily injury or property damage even if no such contract existed, the contractual liability exclusion does not apply. To see how this works, the insured may have signed a lease agreement in which he agrees to hold the owner of the building that houses the business harmless in event of bodily injury occurring on the premises. This lease is thus an "insured contract," the meaning of which is discussed in Businessowners Liability - Part 1 - Definitions. The insured negligently fails to clean up water on the floor inside his business, and a customer slips and falls and is injured and sues both the building owner and the business. The insured would be liable for the injury even without the contract. But because of the insured contract, the insured has agreed to assume the building owner's liability as well as his own.

Exclusion c. liquor liability applies only if the insured business is related to alcoholic beverages—distributing, selling, manufacturing, serving, or furnishing. Therefore, liability arising out of an incident in which alcohol played a part, such as an office party, would be covered as long as alcoholic beverages were not in some manner part of the insured business. Coverage may be purchased for some activities. See Businessowners Program Endorsements.

The 2013 edition of the form added language to clarify that permitting a person to bring alcoholic beverages to the insured's premises for the purpose of consuming the beverages is not by itself being in the business. So, for example, a restaurant that does not serve alcohol but allows customer to bring their own bottles of wine to drink with dinner would not necessarily be subject to this exclusion. The 2013 edition of the form also clarified that even if a claim alleges negligence or wrongdoing in the supervision, hiring, employment, training, or monitoring of others by the insured or in providing or failing to provide transportation with respect to a person under the influence of alcohol, the exclusion still applies.
In its explanatory materials, ISO stated that it reviewed the following court cases before changing the liquor liability exclusion: Penn-America Ins. Co. v. Peccadillos, 27 A.3d (Pa. Super. Ct. 2011), in which the court ruled that the insurer owed a duty to defend under a CGL policy when the insured continued to serve alcohol to visibly intoxicated patrons and ejected them from the premises, after which the intoxicated persons caused an accident; McGuire v. Curry, 766 N.W.2d 501 (S.D. 2009), in which the court ruled that an employer could be held liable for the actions of its underage employee when allowed access to alcoholic beverages on the job; Essex Ins. Co. v. Cafe Dupont, LLC, 674 F.Supp.2d 166 (D.D.C. 2009), in which the court stated that a provision in the insured's CGL policy applied to injuries arising out of the failure to detain any intoxicated person or to provide transportation, not just those who became intoxicated at the insured's establishment; and Simons v. Homatas, 925 N.E.2d 1089 (Ill. 2010), in which the court said that even if a club provides glasses and ice to patrons who bring their own alcoholic beverages, that did not mean that the club was in the business of selling liquor.

d. Workers' Compensation And Similar Laws

Any obligation of the insured under a workers' compensation, disability benefits or unemployment compensation law or any similar law.

e. Employer's Liability

"Bodily injury" to:

(1) An "employee" of the insured arising out of and in the course of:

(a) Employment by the insured; or

(b) Performing duties related to the conduct of the insured's business; or

(2) The spouse, child, parent, brother or sister of that "employee" as a consequence of Paragraph (1) above.

This exclusion applies whether the insured may be liable as an employer or in any other capacity and to any obligation to share damages with or repay someone else who must pay damages because of the injury.

This exclusion does not apply to liability assumed by the insured under an "insured contract".

Analysis

These exposures are intended to be covered under workers compensation and employers liability policies, and so are excluded here. Exclusion e. also eliminates coverage for any third-party over suits; that is, where an employee is injured, sues someone other than his employer for the injury, and the other party in turn sues the employer. For example, an employee, while running an errand for the insured business, slips and falls in another business. He sues that business owner for negligent maintenance of the premises. That business owner in turn sues the insured for negligent hiring—sending such an accident-prone employee to run the errand. The BP 00 03 will not respond. The exception to exclusion e. is that any liability assumed by the insured under an insured contract as defined is covered.

f. Pollution

(1) "Bodily injury" or "property damage" arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants":

(a) At or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to, any insured. However, this subparagraph does not apply to:

(i) "Bodily injury" if sustained within a building and caused by smoke, fumes, vapor or soot produced by or originating from equipment that is used to heat, cool or dehumidify the building, or equipment that is used to heat water for personal use, by the building's occupants or their guests;
(ii) "Bodily injury" or "property damage" for which you may be held liable, if you are a contractor and the owner or lessee of such premises, site or location has been added to your policy as an additional insured with respect to your ongoing operations performed for that additional insured at that premises, site or location and such premises, site or location is not and never was owned or occupied by, or rented or loaned to, any insured, other than that additional insured; or

(iii) "Bodily injury" or "property damage" arising out of heat, smoke or fumes from a "hostile fire";

(b) At or from any premises, site or location which is or was at any time used by or for any insured or others for the handling, storage, disposal, processing or treatment of waste;

(c) Which are or were at any time transported, handled, stored, treated, disposed of, or processed as waste by or for:

(i) Any insured; or
(ii) Any person or organization for whom you may be legally responsible;

(d) At or from any premises, site or location on which any insured or any contractors or subcontractors working directly or indirectly on any insured's behalf are performing operations if the "pollutants" are brought on or to the premises, site or location in connection with such operations by such insured, contractor or subcontractor. However, this subparagraph does not apply to:

(i) "Bodily injury" or "property damage" arising out of the escape of fuels, lubricants or other operating fluids which are needed to perform the normal electrical, hydraulic or mechanical functions necessary for the operation of "mobile equipment" or its parts, if such fuels, lubricants or other operating fluids escape from a vehicle part designed to hold, store or receive them. This exception does not apply if the "bodily injury" or "property damage" arises out of the intentional discharge, dispersal or release of the fuels, lubricants or other operating fluids, or if such fuels, lubricants or other operating fluids are brought on or to the premises, site or location with the intent that they be discharged, dispersed or released as part of the operations being performed by such insured, contractor or subcontractor;
(ii) "Bodily injury" or "property damage" sustained within a building and caused by the release of gases, fumes or vapors from materials brought into that building in connection with operations being performed by you or on your behalf by a contractor or subcontractor; or
(iii) "Bodily injury" or "property damage" arising out of heat, smoke or fumes from a "hostile fire"; or

(e) At or from any premises, site or location on which any insured or any contractors or subcontractors working directly or indirectly on any insured's behalf are performing operations if the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of, "pollutants".

(2) Any loss, cost or expense arising out of any:

(a) 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
(b) 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".

However, this paragraph does not apply to liability for damages because of "property damage" that the insured would have in the absence of such request, demand, order or statutory or regulatory requirement or such claim or "suit" by or on behalf of a governmental authority.

Analysis

The pollution exclusion underwent extensive revision in previous editions of the Businessowners form. The definitions of "pollutants" and "hostile fire" were added to the definitions section, discussed later. Exceptions to certain of the exclusions were placed within the exclusion to which they refer, rather than appearing at the end of the paragraph. For example, the hostile fire exception was moved from a subparagraph following f.(1)(d)(ii) and given its own number f.(1)(a)(iii).

New coverage was also added. There is coverage for bodily injury caused by smoke, fumes, or vapor released by equipment used to heat, cool, or dehumidify the building. There is coverage for bodily injury or property damage arising out of pollutants if an insured contractor is performing operations on a site or location owned by another and that party has been added to the insured's policy as an additional insured. Thus, there is coverage that could have been denied because the site is "occupied by" the insured while performing operations.

Another exception for bodily injury or property damage caused by pollutants is located in f.(1)(d)(ii), which provides that there is coverage for injury arising out of the release of gases or vapors from materials brought into a building in connection with operations being performed by the insured or a subcontractor. So, for example, if the insured is using glue to install carpeting and the fumes sicken some workers inside the building, the BP 00 03 will provide coverage.

The intent of paragraph f.(2) is to preclude coverage for any pollutant cleanup or testing the insured may undertake without any coverage trigger. For example, the insured may decide to clean up an oil spill that has soaked into the ground at the insured premises because of a local ordinance. There is no coverage. But if a hostile fire on the premises causes smoke damage to adjacent property, that is a covered loss and this paragraph should not serve to bar coverage.

g. Aircraft, Auto Or Watercraft

"Bodily injury" or "property damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and "loading or unloading".

This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the "occurrence" which caused the "bodily injury" or "property damage" involved the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft that is owned or operated by or rented or loaned to any insured.

This exclusion does not apply to:

              (1)  A watercraft while ashore on premises you own or rent;
              (2)  A watercraft you do not own that is:
                   (a)  Less than 51 feet long; and
                   (b)  Not being used to carry persons or property for a charge;
              (3)  Parking an "auto" on, or on the ways next to, premises you own or rent, provided the "auto" is not owned by or rented or loaned to you or the insured;
              (4)  Liability assumed under any "insured contract" for the ownership, maintenance or use of aircraft or watercraft; or
              (5)  "Bodily injury" or "property damage" arising out of:
                   (a)  The operation of machinery or equipment that is attached to, or part of, a land vehicle that would qualify under the definition of "mobile equipment" if it were not subject to a compulsory or financial responsibility law or other motor vehicle insurance law where it is licensed or principally garaged; or
                   (b)  The operation of any of the following machinery or equipment:
                         (i)  Cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers; and
                        (ii)  Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment.

   h.  Mobile Equipment

"Bodily injury" or "property damage" arising out of:

              (1)  The transportation of "mobile equipment" by an "auto" owned or operated by or rented or loaned to any insured; or
              (2)  The use of "mobile equipment" in, or while in practice for, or while being prepared for, any prearranged racing, speed, demolition or stunting activity.

Analysis

The second paragraph of exclusion g—referring to negligent supervision—clarifies that the exclusion applies even if there is an attempt to find coverage for an auto accident based on the insured's negligent hiring or training of the person causing the injury. In the past, some courts have found coverage because of the allegations of general negligence, so the CGL form responded to a claim involving autos, when such claims should have been within the purview of the auto form.In the 08 24 edition, ISO revised the language pertaining to such claims of negligence or other wrongdoing for consistency with similar language used in ISO's Commercial General Liability program. Specifically, the words "against any insured" have been added to the sentence, "This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in: ...".This same change has been made in the Liquor Liability exclusion, and the Professional Services exclusion.

There are exceptions to the exclusion. There is coverage for the operation of certain types of equipment, such as cherry pickers or air compressors, even though they are mounted on otherwise excluded vehicles, such as trucks. The parking of an auto on or next to premises owned or rented by the insured business is covered (although there is no coverage for damage to the vehicle itself; the "care, custody or control" exclusion applies).

A revision to exclusion g.(2) increases the foot limitation for a nonowned watercraft from twenty-six feet to fifty-one feet. And,the exclusion does not apply to any watercraft while ashore on premises owned or rented by the insured business.

Liability assumed under an insured contract for the ownership, maintenance, or use of aircraft or watercraft is excepted from the exclusion.

The 2006 form added to the description of bodily injury arising out of the operation of machinery or equipment. The operation of machinery attached to or part of a land vehicle that qualifies under the definition of mobile vehicle if the vehicle is not subject to compulsory or financial responsibility laws or other motor vehicle insurance laws where the vehicle is principally garaged or licensed is excluded. With the 08 24 edition of the form, ISO has removed references to "or motor vehicle registration" from the definitions of auto and mobile equipment to better align the ISO Businessowners program with the ISO Commercial General Liability and Commercial Auto programs.

Finally, exclusion h. precludes coverage for bodily injury or property damage arising out of the transportation of mobile equipment, as defined; again, any claims resulting from this activity should fall under an auto policy. Use of any mobile equipment in prearranged racing or stunting is excluded, although if the equipment were used to, say, prepare a track for a race there would be coverage. So, if a tractor (farm machinery; "mobile equipment" unless licensed for road use) was used to prepare a track for a race and someone was injured because of this activity, there would be coverage, but if the tractor was actually racing the exclusion would apply.

i.     War

"Bodily injury", "property damage" or "personal and advertising injury", however caused, 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 government authority in hindering or defending against any of these.

Analysis

The 2006 form expanded the description of the war exclusion to include warlike actions by a military force. Action in hindering or defending against an actual or expected attack was also added. The action may be taken by any government,sovereign, or other authority using military personnel. Action taken by authority to hinder or defend against insurrection, rebellion, revolution, or usurped power, as well as those acts themselves, are included in the exclusion.

For more information, see War Exclusion Clause.

j. Professional Services

"Bodily injury", "property damage" or "personal and advertising injury" caused by the rendering or failure to render any professional service. This includes but is not limited to:

              (1)  Legal, accounting or advertising services;
              (2)  Preparing, approving, or failing to prepare or approve maps, drawings, opinions, reports, surveys, change orders, designs or specifications;
              (3)  Supervisory, inspection or engineering services;
              (4)  Medical, surgical, dental, X-ray or nursing services treatment, advice or instruction;
              (5)  Any health or therapeutic service treatment, advice or instruction;
              (6)  Any service, treatment, advice or instruction for the purpose of appearance or skin enhancement, hair removal or replacement or personal grooming;
              (7)  Optometry or optical or hearing aid services including the prescribing, preparation, fitting, demonstration or distribution of ophthalmic lenses and similar products or hearing aid devices;
              (8)  Body piercing services; and
              (9)  Services in the practice of pharmacy.

This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the "occurrence" which caused the "bodily injury" or "property damage", or the offense which caused the "personal and advertising injury", involved the rendering or failure to render of any professional service.

Analysis

The BOP liability form, unlike the CGL form, provides this list of excluded professional services. But in a change from the earlier forms, there is no longer an exception made for professional liability of druggists.
The 2010 form added the last paragraph to reinforce the exclusion by expressly addressing claims that allege negligence or wrongdoing in employment, training, hiring, monitoring, or supervision of others by an insured.In the 08 24edition, ISO further revised the language pertaining to such claims of negligence or other wrongdoing for consistency with similar language used in ISO's Commercial General Liability program. Specifically, the words "against any insured" have been added to the sentence, "This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in: ...". This same change has been made in the Liquor Liability exclusion, and the Aircraft, Auto or Watercraft exclusion. There is no impact on coverage.

k. Damage To Property

"Property damage" to:

              (1)  Property you own, rent or occupy, including any costs or expenses incurred by you, or any other person, organization or entity, for repair, replacement, enhancement, restoration or maintenance of such property for any reason, including prevention of injury to a person or damage to another's property;
              (2)  Premises you sell, give away or abandon, if the "property damage" arises out of any part of those premises;
              (3)  Property loaned to you;
              (4)  Personal property in the care, custody or control of the insured;
              (5)  That particular part of real property on which you or any contractor or subcontractor working directly or indirectly on your behalf is performing operations, if the "property damage" arises out of those operations; or
              (6)  That particular part of any property that must be restored, repaired or replaced because "your work" was incorrectly performed on it.

Paragraphs (1), (3) and (4) of this exclusion do not apply to "property damage" (other than damage by fire) to premises, including the contents of such premises, rented to you for a period of seven or fewer consecutive days. A separate Limit of Insurance applies to Damage To Premises Rented To You as described in Paragraph D. Liability And Medical Expenses Limits Of Insurance in Section II – Liability.

Paragraph (2) of this exclusion does not apply if the premises are "your work" and were never occupied, rented or held for rental by you.

Paragraphs (3), (4), (5) and (6) of this exclusion do not apply to liability assumed under a sidetrack agreement.

Paragraph (6) of this exclusion does not apply to "property damage" included in the "products-completed operations hazard".

Analysis

The wording of k.(1) was amended in a previous edition. Before, the wording simply stated that there was no coverage for any property damage to property owned, rented, or occupied by the named insured. This wording left open the possibility that damage to another's property that might arise out of a condition of the insured property could be viewed as a liability claim, and thus provide coverage for repair or restoration of the insured property to prevent damage. Because it was never the intent of the coverage to serve as a maintenance policy for the insured's premises, the wording has been amended to its present form.

The second exclusion eliminates coverage for premises sold, given away, or abandoned by the named insured, although the exception in the subparagraph gives back coverage if the premises were the named insured's work and never occupied, rented, or held for rental by the named insured.

There is no coverage for property loaned to the named insured or for personal property in the care, custody, or control of the insured. The exception gives coverage for property damage not caused by fire or explosion to premises (including contents) that the named insured has rented for a period of seven or fewer consecutive days. (There is coverage for damage caused by fire to premises rented to the named insured; as is discussed later, many of the exclusions do not apply in this situation.)

Likewise, the liability coverage of the policy was never intended to serve as a warranty for the insured's faulty work. However, exclusion k.(5) applies only to the particular part of real property upon which the named insured or any contractor is performing operations. Therefore, if damage to the remainder of the property occurs there is coverage.

Exclusion k.(6) does not apply to property damage falling within the products-completed operations hazard—in other words, this exclusion applies to on-going operations.

l. Damage To Your Product

"Property damage" to "your product" arising out of it or any part of it.

Analysis

Exclusion l. states that if the named insured's own product sustains damage because of a condition within the product itself, there is no liability coverage. In other words, the insured cannot rely on the liability coverage to restore his damaged product.

m. Damage To Your Work

"Property damage" to "your work" arising out of it or any part of it and included in the "products-completed operations hazard".

This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor.

Analysis

For a discussion of the definitions of "property damage," "your work," and "products-completed operations hazard," see Businessowners Liability - Part 1 - Definitions. The exclusion applies to work that has been completed, not work that is in progress (other exclusions may apply to work in progress). The exclusion does not apply to work that has been performed on the insured's behalf by a subcontractor. For example, the insured business is carpet sales and installation. The installation is contracted out. If the subcontractor mistakenly uses a highly flammable liquid instead of glue and the residence in which the carpeting is being installed catches fire, the exclusion does not apply to the fire
damage to the residence.

For a comprehensive discussion of these property damage exclusions, see Faulty Work and Products Claims "Your Product" and "Your Work" Exclusions.

n. Damage To Impaired Property Or Property Not Physically Injured

"Property damage" to "impaired property" or property that has not been physically injured, arising out of:
              (1)  A defect, deficiency, inadequacy or dangerous condition in "your product" or "your work"; or
              (2)  A delay or failure by you or anyone acting on your behalf to perform a contract or agreement

in accordance with its terms.

This exclusion does not apply to the loss of use of other property arising out of sudden and accidental physical injury to "your product" or "your work" after it has been put to its intended use.

Analysis

Impaired property is tangible property other than the insured's own work or product that can no longer be used, or is less useful, because it incorporates the insured's work or product. However, the property could be restored to usefulness if the insured's work or product were removed or replaced. Or, perhaps, the tangible property is less useful or unable to be used because of a delay or a failure in carrying out a contract on the part of the insured or by someone acting for the insured. This exclusion precludes coverage. Using the carpet installation example, if the insured installs bright orange carpeting in a living room when the specs call for beige. The tangible property—in this case, the room—can be restored if the carpeting is replaced. But if the insured's own work or property suddenly and accidentally sustains physical injury that results in the other property's loss of use after that property has been put to its intended use, the liability coverage will respond.

o. Recall Of Products, Work Or Impaired Property

Damages claimed for any loss, cost or expense incurred by you or others for the loss of use, withdrawal, recall, inspection, repair, replacement, adjustment, removal or disposal of:

              (1)  "Your product";
              (2)  "Your work"; or
              (3)  "Impaired property";

if such product, work or property is withdrawn or recalled from the market or from use by any person or organization because of a known or suspected defect, deficiency, inadequacy or dangerous condition in it.

Analysis

This type of loss is part of the cost of doing business. In essence, the insured is presumed to be in the business of selling products fit for their intended purpose. The exclusion precludes coverage not only for expenses the insured may incur, but for those incurred by others as well.

p. Personal And Advertising Injury

"Personal and advertising injury":

              (1)  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";
              (2)  Arising out of oral or written publication, in any manner, of material, if done by or at the direction of the insured with knowledge of its falsity;
              (3)  Arising out of oral or written publication, in any manner, of material whose first publication took place before the beginning of the policy period;
              (4)  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;
              (5)  Arising out of a breach of contract, except an implied contract to use another's advertising idea in your "advertisement";
              (6)  Arising out of the failure of goods, products or services to conform with any statement of quality or performance made in your "advertisement";
              (7)  Arising out of the wrong description of the price of goods, products or services stated in your "advertisement";
              (8)  Committed by an insured whose business is:
                   (a)  Advertising, broadcasting, publishing or telecasting;
                   (b)  Designing or determining content of web sites for others; or
                   (c)  An Internet search, access, content or service provider.
However, this exclusion does not apply to Paragraphs 14.a., b. and c. of "personal and advertising injury" under Paragraph F. Liability And Medical Expenses Definitions.
For the purposes of this exclusion, the placing of frames, borders or links, or advertising, for you or others anywhere on the Internet, by itself, is not considered the business of advertising, broadcasting, publishing or telecasting;
              (9)  Arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants" at any time;
             (10)  With respect to any loss, cost or expense arising out of any:
                   (a)  Request, demand or order 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
                   (b)  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";
             (11)  Arising out of an electronic chatroom or bulletin board the insured hosts, owns or over which the insured exercises control;
             (12)  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;
             (13)  Arising out of the unauthorized use of another's name or product in your e-mail address, domain name or metatags, or any other similar tactics to mislead another's potential customers.

Analysis

The definition of "personal and advertising" injury is discussed later. In earlier form editions, these were separate terms: personal injury and advertising injury. Now they are combined, and the exclusions that were heretofore exclusions p. and q. are combined into exclusion p. Some of the previous language has been simplified.

If the insured knows beforehand that an act will violate the rights of another and result in injury, there is no coverage. (Compare this with the exclusion for expected or intended bodily injury or property damage.) If the insured knows something is false, but publishes it anyway, there is no coverage. There is no coverage for publication of material prior to the beginning of the policy.

ISO added language in the 2013 revision to Exclusions p. (2) and (3) to clarify that publication is in any manner, including electronic and Internet publications.

Exclusions p.(4) and (5) apply to contractual liability. Liability the insured would have had in absence of a contract is covered. And, if the insured has an implied contract to use another's advertising idea—perhaps a friend tells the insured to feel free to use a slogan the friend has created—and the implied contract is breached, there is coverage.

Exclusions p. (6) and (7) apply to the risks and costs of doing business, which are uninsurable.

Exclusion p. (8) applies to insureds whose business is advertising, publishing, telecasting, broadcasting, or web designer or internet provider, who are covered only for false arrest, malicious prosecution, and invasion of the right of privacy. Specialty coverage must be arranged for the other exposures.

Exclusions p. (9) and (10) are in place because some courts have held that the CGL form (and thus the BOP) provides coverage for pollution under "wrongful entry or eviction or other invasion of the right of private occupancy." In order to clarify that damages resulting from pollution are not covered as "personal and advertising injury," ISO added wording to the pollution exclusion specifying that it also applies to these coverages. See CGL Coverage Form—Coverage A, for a discussion of the CGL form's pollution exclusion.

Exclusions p. (11) and (13) preclude coverage for liability arising out of Internet activities, such as chat rooms or unauthorized use of another's name in the insured's own web address.

Exclusion p. (12) applies to infringement of intellectual property rights. The 2010 form added wording to reinforce that the exclusion does not apply when personal and advertising injury stems from other intellectual property rights involving the use of another's advertising idea in the insured's advertisement. There is an exception to this, and that is infringement in the insured's advertisement, a defined word. For example, the insured business may refer to its products as outperforming those of Company X in an advertisement, and even go so far as to mimic Company X, but cannot actually appropriate Company X's ideas or method of doing business.

q. Electronic Data

Damages arising out of the loss of, loss of use of, damage to, corruption of, inability to access, or inability to manipulate electronic data.

However, this exclusion does not apply to liability for damages because of "bodily injury".

As used in this exclusion, electronic data means information, facts or computer programs stored as or on, created or used on, or transmitted to or from computer software (including systems and applications software), on hard or floppy disks, CD-ROMs, tapes, drives, cells, data processing devices or any other repositories of computer software which are used with electronically controlled equipment. The term computer programs, referred to in the foregoing description of electronic data, means a set of related electronic instructions which direct the operations and functions of a computer or device connected to it, which enable the computer or device to receive, process, store, retrieve or send data.

Analysis

For consistency with the liability program, and to further enforce that the Businessowners liability section does not provide coverage for loss of electronic data, ISO added this exclusion to the 2006 form. While coverage is not impacted, this exclusion provides clarification of underwriting intent.

The 2010 form added a description of computer programs to the end of the exclusion.

The 2013 form made clear that the exclusion does not apply to liability for damages because of bodily injury.

r. Criminal Acts

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

Analysis

This exclusion was moved from exclusion p. (4) to this point in the policy in the 2006 form.

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

"Bodily injury", "property damage" or "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;
              (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, 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.

Analysis

The addition of this exclusion, made to the 2006 form, may be viewed as a reduction of coverage in those states where courts have enabled coverage for violations of the TCPA, CAN-SPAM Act, or similar laws. The 2010 form updated the exclusion by adding the Fair Credit Reporting Act provisions.

Exclusions c., d., e., f., g., h.,i., k., l., m., n., and o. in Section II – Liability do not apply to damage by fire or explosion to premises while rented to you, or temporarily occupied by you with permission of the owner. A separate Damage To Premises Rented To You Limit of Insurance applies to this coverage as described in paragraph D. Liability And Medical Expenses Limits of Insurance in Section II – Liability.

The purpose of this exception is to provide what is commonly referred to as fire legal liability coverage. There is a separate amount of insurance available for this coverage; see the Limits of Insurance section.

Exclusions Applicable To Medical Expenses

We will not pay expenses for "bodily injury":

          a.  To any insured, except "volunteer workers".
          b.  To a person hired to do work for or on behalf of any insured or a tenant of any insured.
          c.  To a person injured on that part of premises you own or rent that the person normally occupies.
          d.  To a person, whether or not an "employee" of any insured, if benefits for the "bodily injury" are payable or must be provided under a workers' compensation or disability benefits law or a similar law.
          e.  To a person injured while practicing, instructing or participating in any physical exercises or games, sports or athletic contests.
           f.  Included within the "products-completed operations hazard".
          g.  Excluded under Business Liability Coverage.

Analysis

There is no coverage for anyone qualifying as an insured, with the exception of volunteer workers.Coverage for other than volunteer workers is properly the province of workers compensation. Thus, a person who volunteers, receiving no financial compensation, will not have to rely on his own medical insurance (or, in a worse-case scenario, his own pocketbook) in event of an injury.

There is no coverage for a person who is injured while on the part of the insured's owned or rented premises normally occupied by that person. It is up to that person to provide her own medical insurance. And,there is no coverage for any person if benefits are payable or must be provided under workers compensation. For example, if an employee of another company is delivering something to the insured business and is injured, the other employer's workers compensation should respond as long as the benefits are payable or must be provided.

There is no coverage for any bodily injury that would otherwise be excluded under the business liability coverage, or while taking part in physical exercises, games, sports, or athletics.

Nuclear Energy Exclusion 

3. Applicable To Both Business Liability Coverage And Medical Expenses Coverage – Nuclear Energy Liability Exclusion

This insurance does not apply:

a. Under Business Liability Coverage, to "bodily injury" or "property damage":

(1) With respect to which an insured under the Policy is also an insured under a nuclear energy liability policy issued by the Nuclear Energy Liability Insurance Association, Mutual Atomic Energy Liability Underwriters or Nuclear Insurance Association of Canada, or would be an insured under any such policy but for its termination upon exhaustion of its limit of liability; or
(2) Resulting from the "hazardous properties" of "nuclear material" and with respect to which:
(a) Any person or organization is required to maintain financial protection pursuant to the Atomic Energy Act of 1954, or any law amendatory thereof; or
(b) The insured is, or had this Policy not been issued would be, entitled to indemnity from the United States of America, or any agency thereof, under any agreement entered into by the United States of America, or any agency thereof, with any person or organization.

b. Under Medical Expenses Coverage, to expenses incurred with respect to "bodily injury" resulting from the "hazardous properties" of "nuclear material" and arising out of the operation of a "nuclear facility" by any person or organization.

c. Under Business Liability Coverage, to "bodily injury" or "property damage" resulting from the "hazardous properties" of the "nuclear material"; if:

(1) The "nuclear material":
(a) Is at any "nuclear facility" owned by, or operated by or on behalf of, an insured; or
(b) Has been discharged or dispersed therefrom;
(2) The "nuclear material" is contained in "spent fuel" or "waste" at any time possessed, handled, used, processed, stored, transported or disposed of by or on behalf of an insured; or
(3) The "bodily injury" or "property damage" arises out of the furnishing by an insured of services, materials, parts or equipment in connection with the planning, construction, maintenance, operation or use of any "nuclear facility"; but if such facility is located within the United States of America, its territories or possessions or Canada, this Exclusion (3) applies only to "property damage" to such "nuclear facility" and any property thereat.

d. As used in this exclusion:

(1) "By-product material" has the meaning given it in the Atomic Energy Act of 1954 or in any law amendatory thereof;
(2) "Hazardous properties" include radioactive,toxic or explosive properties;
(3) "Nuclear facility" means:
(a) Any "nuclear reactor";
(b) Any equipment or device designed or used for:
(i) Separating the isotopes of uranium or plutonium;
(ii) Processing or utilizing"spent fuel"; or
(iii) Handling,processing or packaging "waste";
(c) Any equipment or device used for the processing, fabricating or alloying of "special nuclear material" if at any time the total amount of such material in the custody of the insured at the premises where such equipment or device is located consists of or contains more than 25 grams of plutonium or uranium 233 or any combination thereof, or more than 250 grams of uranium 235;
(d) Any structure, basin, excavation, premises or place prepared or used for the storage or disposal of "waste";
and includes the site on which any of the foregoing is located, all operations conducted on such site and all premises used for such operations;
(4) "Nuclear material" means "source material","special nuclear material" or "by-product material";
(5) "Nuclear reactor" means any apparatus designed or used to sustain nuclear fission in a self-supporting chain reaction or to contain a critical mass of fissionable material;
(6) "Property damage" includes all forms of radioactive contamination of property;
(7) "Source material" has the meaning given it in the Atomic Energy Act of 1954 or in any law amendatory thereof;
(8) "Special nuclear material" has the meaning given it in the Atomic Energy Act of 1954 or in any law amendatory thereof;
(9) "Spent fuel" means any fuel element or fuel component, solid or liquid, which has been used or exposed to radiation in a "nuclear reactor";
(10) "Waste" means any waste material:
(a) Containing "by-product material" other than the tailings or wastes produced by the extraction or concentration of uranium or thorium from any ore processed primarily for its "source material" content; and
(b) Resulting from the operation by any person or organization of any "nuclear facility" included under Paragraph (a)or(b) of the definition of "nuclear facility".

Analysis

The BOP has the nuclear exclusion within it, while it must be added via endorsement IL 00 21 09 08 to the CGL form. For a discussion of endorsement IL 00 21 05 04 see Nuclear Energy Liability Exclusion.

The hazards presented by nuclear processing or material are not contemplated within the Businessowners program rate structure, and therefore are excluded.

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