General Liability Insurance – Medical Expenses Coverage
As it has been established, general liability coverage is for situations where a third-party claims you or your business was negligent for bodily injury or property damage and sues for those damages. General liability protects your business against incidents that may occur on your premises or at other covered locations where you normally conduct business. When you look at the declarations pages on your commercial general liability policy, it looks like this:
|BUSINESS LIABILITY||LIMITS OF INSURANCE|
|LIABILITY AND MEDICAL EXPENSES||$1,000,000|
|MEDICAL EXPENSES – ANY ONE PERSON||$10,000|
|PERSONAL AND ADVERTISING INJURY||$1,000,000|
|DAMAGES TO PREMISES RENTED TO YOU||$300,000|
|PRODUCTS-COMPLETED OPERATIONS AGGREGATE||$2,000,000|
Business owners often wonder what the medical expenses coverage entails. They sometimes ask why this limit is so low in comparison to the other limits listed? “Medical expenses are costly, why only $10,000 limits here?” The answer to this question is, where liability coverage is for situations where a third-party claims your negligence for bodily injury or property damage, the medical payments coverage is an exception, as it pays medical expenses for bodily injury to third parties as a result of your operations regardless of fault.
People are less likely to sue you if they receive prompt medical payments to cover the costs of any injuries they have sustained for which they could claim your business or organization is liable. Medical Payments coverage gets the payments to them without their having to file a lawsuit or go to court and engage in a lengthy claims process. This coverage also allows your insurer to pay small nuisance claims without the need for costly legal expenses.
If there is a liability claim and medical expenses are paid, but a lawsuit still arises, general liability will still protect for a covered claim. The purpose of medical expense coverage, however, is to prevent this from happening.
I was wondering why my quote only had $5k for medical expense. I too thought this was way too low for the average medical cost bill, but your explanation makes a lot of sense! Thanks.
Glad to hear this explanation helped Tony. Thanks for reading!
Is this common to all general liability policies? Do they sometimes seperate the medical expense onto a different policy?
Yes, medical expense coverage is common to all general liability policies unless specifically excluded by a carrier by endorsement. Since medical expenses if often considered a “goodwill” coverage to prevent further liability from arising, I am not familiar with any standalone policies that are written seperately
I found out the hard way that the issue of “medical payments” only confuses the issues of someone injured on the property. If there is no liability, why should the home owner or business have to pay anything? I’ve heard that the injured person can’t be asked to sign a waiver stating that they will not hold the business liable in return for the money … and the payment can in fact be used to finance a liability lawsuit. When I had to call my insurance about liability, they kept switching the topic to medical payments which I was NOT discussing. Then they quoted exclusions for medical payments that were to convince me that I wouldn’t be covered for liability. If the claims people can be confused, then so can the policy holder. Even if it costs MORE money, I am going to have the medical payments option removed from my policies. If I’m at fault, I deserve to be held responsible. If I am not at fault, the party that is responsible should have to pay.