State Farm Insurance License Practice Exam

What does Advertising Injury cover under the CGL?

1. Defamation through high-pressure sales tactics

2. Losses related to copyright infringement and privacy violations

3. Property damage caused by advertisements

4. Injuries caused during product demonstrations

The correct answer is: Losses related to copyright infringement and privacy violations

Advertising Injury within the General Liability (CGL) policy specifically addresses offenses related to the marketing activities of a business. This coverage is designed to protect businesses from claims that may arise due to the promotion of their products or services. The correct choice highlights how Advertising Injury encompasses losses related to copyright infringement, which occurs when a company uses protected material without permission during its advertising. It also covers privacy violations, which could include situations where a business improperly discloses personal information about individuals in its advertisements, leading to legal claims. This coverage is particularly important for businesses that utilize various advertising platforms, as it helps safeguard against potential legal actions resulting from marketing practices. Other options do not align with the specific definitions of Advertising Injury; for instance, while defamation is covered under certain conditions, it specifically pertains to false statements leading to reputational harm rather than high-pressure sales tactics, which don’t fall under this insurance coverage. Similarly, property damage caused by advertisements and injuries during product demonstrations would be addressed under different categories in a CGL policy, such as property damage liability and products/completed operations liability, rather than Advertising Injury.