How are supplementary payments categorized in liability insurance?

In liability insurance, supplementary payments are categorized as part of the regular insurance limit because they are expenses that an insurer agrees to cover in addition to the damages awarded to the insured. This means that while they do not reduce the liability policy limit for damages, they are still considered part of the overall coverage.

Supplementary payments can include costs such as legal fees, court costs, and other related expenses incurred while defending the insured against a claim. Since these payments are typically included within the overall insurance limit, they effectively enhance the coverage provided by the policy without requiring separate limits or being classified as additional, optional coverage. By understanding this categorization, policyholders can better navigate their insurance coverage and what it entails when faced with liability claims.