A term used in liability policies for the costs associated with the investigation
and resolution of claims. Supplementary payments are normally defined to include
such items as first aid expenses, premiums for appeal and bail bonds, pre- and
postjudgment interest, and reasonable travel expenses incurred by the insured
at the insurer's request when assisting in the defense of a claim. Actual settlements/judgments
are considered damages rather than supplementary payments. Attorneys' fees may
be considered as either damages or supplementary payments, depending on the
policy. Commercial general liability (CGL) and business automobile liability
policies cover supplementary payments in addition to their limits of liability.
In contrast, supplementary payments reduce the limit of coverage under most
(although not all) professional liability policies.
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