Many General Liability Polic ies do have an exclusion for Coverage C – Medical Payments. 

Medical Payments Coverage provides a limited amount of coverage, typically $5,000, for medical payments for bodily injury caused by an accident regardless of fault.  This coverage is intended to allow you to pay for first aid for injuries to an individual without requiring the injured party to prove you were responsible for the injury.  The rational for this coverage is that it may be possible to avoid a lawsuit (and the associated expenses) if prompt medical attention is provided without raising the issue of liability.  If it is determined that your operations were not responsible for the injury, the insurance carrier would still pay the First Aid Expenses you incurred under the Medical Payments Coverage.

With this exclusion in place, injured people must prove that you were liable for their injuries before they would receive payment.  This does not necessarily require that the injured party sue you to collect.  If it is obvious from the facts of the situation that you are responsible for injuries, the insurance carrier would pay the claim.

The policy would also provide for your defense against claims for bodily injury or property damage brought by a third party.  The duty to defend is separate from the Medical Payments Exclusion.  This exclusion does not change the insurance carrier’s rights and duties to defend the policyholder.   

On the positive side, the expenses for First Aid are moved into the Supplementary Payments section of the coverage.  Supplementary Payments do not have the sub limit found on the Medical Payments.  The Supplementary Payments limits are the same as the policy limits of $1,000,000 per occurrence and $2,000,000 annual aggregate.  So the policy does provide protection for First Aid expenses for which you are legally liable.  Also, the exclusion does not reduce your limits of insurance.

The Medical Payments Exclusion is very common on liability policies for operations involving games and sporting activities.  In fact, the Commercial Lines Manual requires the exclusion be included on General Liability Policies for animal rides, racket clubs, swimming clubs, dude ranches, guides and outfitters, hunting preserves, swimming pools, skating rinks and ski lifts. 

In a nutshell:  Excluding Medical Payments Coverage transfers the onus of proving liability to the injured party.  If someone claims you were liable for bodily injury or property damage you would have defense coverage under this policy – even if the claims were groundless.  However, to collect for their damages the claimant must show that you are liable.

Scott DeSousa
CIC The Friedman Group, Inc.
909 Main St. - Suite 202
PO Box 759
Dubuque, IA 52004-0759
(563) 556-0272
(563) 556-4425
desousas@friedman-group.com           
www.friedman-group.com