Medical payments coverage

Medical payments coverage, usually called “med pay,” is a small, separate part of many general liability policies. It can pay a visitor’s reasonable medical expenses after an accident at your business without anyone having to prove you were at fault, and without a lawsuit.

How it works

In the standard general liability form, med pay is Coverage C. It typically applies when someone who isn’t an insured or an employee is hurt in an accident on your premises or because of your operations. It can pay for reasonable expenses such as first aid, doctor visits, X-rays and ambulance service.

Many policies set conditions like these:

• The expenses have to be incurred and reported within a set time, commonly one year from the accident.
• The injured person may need to be examined by a doctor the insurer chooses and allow access to medical records.
• It has its own per-person limit on your declarations pageDeclarations pageThe declarations page is the summary at the front of an insurance policy listing who’s insured, what’s covered, the limits, deductibles, premium and policy dates.Read the definition, usually far smaller than your per-occurrence limitPer-occurrence limitA per-occurrence limit is the most a liability policy will pay for all claims arising from a single incident, however many people are hurt or claims are filed.Read the definition.
• It doesn’t cover your employees, whose work injuries fall under workers’ comp. It also typically excludesExclusionAn exclusion is a provision in an insurance policy that removes coverage for specific causes, types of loss, property or activities the policy would otherwise cover.Read the definition people hurt while playing sports or taking part in athletic activities.

Some policies remove med pay by endorsement, so check yours.

Why it matters for a small business

Paying a small bill quickly can settle an incident with goodwill before it turns into a liability claim. Because med pay works regardless of fault, nobody has to decide who was to blame first. If the injured person later sues, that claim is handled under the bodily injury liability part of the policy, subject to its terms and limits.

An example