Liability Insurance & Supplemental Payments
Liability Insurance & Supplemental Payments
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Liability Insurance & Supplementary Payments

PUBLICATION: Insurance Litigation

ISSUE: Vol. 25 #4

DATE: 2003

Standard general liability policies contain a "Supplementary Payments" provision which extends to both Coverage A and Coverage B. There 1s remarkably little law' on this subject.1 The insurer agrees to pay, among other things, all the expenses it incurs, certain bonds to release some attachments, so long as the amount of those bonds is within the limits of the insurance, costs taxed against an insured during the suit, certain amounts of prejudgment interest and certain amounts of post-judgment interest. Occasion­ally, insureds try· to argue that insurers must post supersedeas bonds under this part of the insurance policy. That argument obviously lacks the foundation of the policy. At the same time, an insurer may have an obligation to file a supersedeas bond as an implication of the duty to defend, but that is a different matter. Under the terms of the insurance contract discussed here, an insurer is liable to pay the supplementary payments only for suits it defends. One would suppose, offhand, that the insurer would owe similar sums for analogous expenses in suits it wrongfully fails to defend. Interestingly we have found no law on this subject but our conclusion seems obvious enough.