Where medical fits into liability coverage
It’s a nightmare that has befallen many small businesses.
One of your best clients has just made a significant purchase, and it seems the world couldn’t be a better place. Then, on their way to their car, disaster strikes. A sudden trip, a slip and fall, and your happy client is now hurt, angry and a potential plaintiff in a lawsuit against your business, all in the space of a few disastrous seconds.
Although you can wish it hadn’t happened, and you should always be certain to take any precautions about your business location to try and prevent such accidents, what happens from the standpoint of your insurance coverage?
There are two extremely valuable provisions in a solid business insurance policy designed specifically to respond to incidents such as this. The goal of the provisions is twofold: protect your business from the financial risk of such accidents—legal fees for defense, the potential for large lawsuit awards against you; and try to quickly respond to the pain of the victim in ways that help to avoid lawsuits in the first place.
The provision designed to remedy the first of these is your liability coverage. While nearly everyone knows such coverage is meant to pay the ultimate judgments and claims for negligence up to your policy limits, not as many realize one of the real values of your liability insurance is to provide you with an adequate defense against such claims.
Once you report the accident to your insurance company, unless a policy exclusion applies to the accident, your insurance company will now handle all the legal issues of the claim for you. These include providing an attorney, paying court costs, interviewing witnesses and negotiating with the injured party. In short, your responsibility is to notify your insurance company as soon as practicable after the accident, and continue to promptly forward all information (paperwork, legal notices, etc.) you receive pertaining to the claim. It’s so important that you do nothing to impair your insurance company’s ability to properly handle the claim that your liability policy has a provision requiring your assistance and cooperation in the process.
One thing you must never do, for example, is voluntarily offer any settlement or assume any obligation, beyond first aid, to the injured party without the company’s permission. The reasons for all this get too legalistic to explain. The really great news is that in nearly all standard insurance policies, all of this work is included in your coverage without deducting a nickel from your policy limits! Those limits remain totally available to pay any final award against your business.
As good as your liability insurance is, it focuses on settling the potential or actual lawsuit. There is another policy provision designed to try and avoid the lawsuit altogether known as “medical payments” or “medical expenses.” It provides on-the-scene first aid coverage meant to quickly comfort the injured person and to get them immediate and effective treatment. A typical policy provision states: “We will make these payments regardless of fault. These payments will not exceed the applicable limit of insurance. We will pay reasonable expenses for: (1) first aid administered at the time of an accident; (2) necessary medical, surgical, x-ray and dental services, including prosthetic devices; and (3) necessary ambulance, hospital, professional nursing and funeral services.”
Notice this language clearly illustrates both what the policy will pay for and the fact it is meant to offer it immediately. One of its best features is the “regardless of fault” provision. This means you can get the injured person’s immediate treatment bills paid promptly without any necessity to get into the often inflammatory discussion that leads to hurt feelings and lawsuits concerning who did what to whom. And since you admit no fault by offering the benefits under your medical payments, you do not prejudice in any way you or your insurance company’s ability to properly contest any lawsuit that may later seek to assign blame.
To sum up, think of client accidents as a fire breaking out. Medical payments coverage is that fire extinguisher hanging on the office wall you can use anytime to try and put out the small fires before they can turn into the big blazes. But when that fire extinguisher just isn’t going to be enough, get out of harm’s way and let the trained professionals take over—your liability coverage.
Coverages this important, like all good fire-fighting supplies, should be kept in plentiful supply! Talk to your Trusted Choice® insurance professional about making sure your liability and medical payments limits are sufficient to keep YOU from getting burned!