Medical Payments
No-fault CGL coverage that pays medical expenses for third parties injured on the insured's premises or by the insured's operations, regardless of liability.
What It Is
Medical Payments, designated as Coverage C in the standard ISO CGL policy, provides no-fault coverage for medical expenses incurred by third parties who are injured on the insured's premises or as a result of the insured's operations. Unlike Coverage A, Medical Payments does not require a determination of legal liability — the insured does not have to be at fault for the coverage to apply.
The standard Medical Payments limit is $5,000 per person, though it can be increased. Expenses must be incurred within one year of the accident. The coverage is intended as a goodwill mechanism to pay small medical bills promptly, reducing the likelihood that the injured party will hire an attorney and pursue a larger liability claim.
Medical Payments does not apply to injuries to the named insured's employees (covered by workers compensation), to persons injured during athletic activities, or to persons on the insured's premises as trespassers.
Why It Matters for Brokers
While Medical Payments limits are small relative to CGL per-occurrence limits, this coverage plays an important role in claims management. Brokers should ensure their clients understand that prompt payment of small medical bills under Coverage C can prevent claims from escalating into costly litigation. Some contracts and lease agreements specify a minimum Medical Payments limit, typically $5,000 or $10,000, that brokers must verify.
Real-World Example
A customer visiting a retail store slips on a freshly mopped floor and sprains her wrist. The emergency room visit costs $3,800. Rather than waiting for a liability determination, the store's CGL policy pays the $3,800 under Medical Payments (Coverage C) within two weeks. The customer receives prompt reimbursement and does not pursue a liability claim. Without Medical Payments, the customer might have hired an attorney and filed a $50,000 bodily injury lawsuit.
Common Mistakes
- 1Assuming Medical Payments is the same as bodily injury liability — Coverage C is no-fault and has a much lower per-person limit.
- 2Not verifying the Medical Payments limit against lease or contract requirements that may specify $10,000 or higher.
- 3Failing to explain to clients that Medical Payments is a proactive claims tool, not just a line item on the policy.
How brokerageaudit.com Handles This
Policy Checker extracts the Medical Payments per-person limit and verifies it against any contractual requirements in the account record. COI Manager displays the Medical Payments limit in the appropriate field on ACORD 25 certificates. Submission Intake includes Medical Payments limit as a standard field in quote comparison worksheets to ensure consistent quoting across carriers.