Definition:Coverage B
🏠 Coverage B designates a specific section within standardized insurance policy forms — most commonly the homeowners (HO) and commercial general liability (CGL) policies — that addresses a defined category of protection distinct from the policy's primary coverage grant. In a homeowners policy, Coverage B covers "other structures" on the insured premises, such as detached garages, fences, and sheds, separate from the dwelling itself (Coverage A). In a CGL policy, Coverage B provides personal and advertising injury liability protection, covering offenses like libel, slander, false arrest, and infringement of copyright in advertising, as distinguished from the bodily injury and property damage liability addressed under Coverage A.
🔧 The operational details depend entirely on which policy form is in play. Under the ISO homeowners form, Coverage B typically defaults to 10% of the Coverage A dwelling limit and applies to structures detached from the main residence that are not used for business purposes. Underwriters may adjust this percentage based on the property profile. Under the ISO CGL form, Coverage B carries its own aggregate limit, separate from the Coverage A aggregate, and is triggered by a defined list of offenses rather than by an " occurrence" in the traditional bodily injury sense. Claims professionals must carefully distinguish which coverage part applies to a given claim, as the triggers, exclusions, and limits differ materially between Coverage A and Coverage B within the same policy.
📌 Understanding the distinction matters enormously for both policyholders and insurance professionals. On the homeowners side, failing to recognize that a high-value outbuilding falls under Coverage B — with its default sub-limit — can leave a homeowner significantly underinsured unless endorsements are added. On the CGL side, Coverage B has become increasingly relevant as businesses face claims related to digital advertising practices, social media activity, and intellectual property disputes. Brokers and risk managers who overlook Coverage B during policy placement may leave clients exposed to liabilities that are both common and expensive to defend.
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