Supplementary Payments

What Does Supplementary Payments Mean?

Supplementary payments are additional payments made beyond the basic liability insurance coverage. These costs are often incurred when an insured party is defending against a claim or investigation. Examples of supplementary payments include coverage for reasonable travel expenses, first aid, bail bond premiums, and post-judgment interest, among others.

Insuranceopedia Explains Supplementary Payments

Many liability insurance policies include clauses in which the insurer agrees to cover supplementary payments. This can be particularly helpful if an insured party needs to participate in a claims investigation. If a lawsuit arises due to a dispute over the claim, attorney’s fees may be included in the supplementary payments. However, these fees could also be considered damages from the lawsuit. Whether they are classified as supplementary payments or damages depends on the specific terms of the policy.