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Supplementary Payments

Supplementary Payments

Definition

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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