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6.9 Section II – Liability Coverages

Liability coverage protects the insured when they become legally responsible for bodily injury or property damage sustained by another person. Coverage may apply when the injury or damage results from the activities of the insured or the insured's family members. Covered occurrences may take place on the insured premises, near the insured premises, or away from the insured premises. Liability coverage may also apply to injuries or damage caused by the insured's pets. This coverage is designed to protect the insured against personal liability exposures. It does not apply to liability arising out of business activities or automobile-related exposures.

Note

Section II of the Homeowners policy provides liability coverages, and its provisions are the same across all Homeowners forms. Payments made under Section II are not subject to a deductible.

Coverage E – Personal Liability​

If a claim is made or a lawsuit is brought against an insured because of bodily injury or property damage caused by a covered occurrence, the policy may provide liability protection. The occurrence must take place during the policy period. If coverage applies, the insurer will pay up to the policy's liability limit for damages the insured is legally responsible to pay. This may include prejudgment interest awarded against the insured.

Note

Personal liability refers to liability for bodily injury or property damage for which the insured is legally responsible. This should not be confused with personal injury. Personal injury refers to certain non-physical injuries, such as defamation, libel, slander, or invasion of privacy. Personal injury coverage is not automatically included under the standard Homeowners liability coverage and generally must be added by endorsement.

The policy also gives the insurer the duty to defend the insured against a covered claim or lawsuit. The defense is provided at the insurer's expense, even if the suit is groundless, false, or fraudulent. The insurer may investigate and settle any claim or suit it believes should be resolved. The duty to defend ends once the Coverage E limit has been exhausted by payment of a judgment or settlement. Defense costs are paid in addition to the Coverage E limit of liability.

The Coverage E per occurrence limit is shown in the Declarations. This is the most the insurer will pay for covered damages arising out of one occurrence. The standard minimum Coverage E limit is $100,000 per occurrence.

Coverage F – Medical Payments to Others​

Under Coverage F — Medical Payments to Others, the policy pays necessary medical expenses incurred by an injured third party because of an accident causing bodily injury. The expenses must be incurred within 3 years from the date of the accident, and payment is limited to the Coverage F limit. Covered medical expenses may include reasonable charges for medical, surgical, X-ray, dental, ambulance, hospital, professional nursing, prosthetic devices, and funeral services.

Coverage F — Medical Payments to Others does not require the insured to be legally liable for the injury. Coverage may apply even when there is no negligence, fault, or legal responsibility on the part of the insured. Medical payments coverage is often considered a goodwill coverage. It allows the insurer to pay certain medical expenses quickly, which may help reduce the likelihood of a lawsuit.

Coverage F — Medical Payments to Others does not apply to an insured or to regular residents of the insured's household. However, an exception applies for residence employees. Coverage F may provide medical payments to:

  • A person who is on the insured location with the permission of an insured; or
  • A person who is away from the insured location, if the bodily injury:
    • Arises out of a condition on the insured location or the immediate surrounding area;
    • Is caused by the activities of an insured;
    • Is caused by a residence employee while working for the insured; or
    • Is caused by an animal owned by or in the care of an insured.

The Coverage F limit of liability applies per person for any one accident. This means the limit is the most the insurer will pay for medical expenses for each injured person arising out of a single accident. The Coverage F limit is shown on the Declarations page. The standard minimum limit is $1,000 per person.

An Insurance Story

The Nelsons invite friends and neighbors to their home for a housewarming party. During the party, several guests slip and fall on an icy patch on the front walkway. Some guests suffer minor injuries, but one guest breaks an ankle and needs medical treatment.

Under Coverage F — Medical Payments to Others, the Nelsons' policy may pay the injured guest's necessary medical expenses, up to the Coverage F limit of liability. This coverage may apply without requiring the guest to prove that the Nelsons were legally liable for the injury.

If the Coverage F payment does not cover all of the guest's expenses and the guest later sues the Nelsons for additional damages, such as surgical costs or other related expenses, Coverage E — Personal Liability may apply. The insurer would provide a legal defense at its own expense and pay covered damages the Nelsons are legally required to pay, up to the Coverage E limit of liability.