Defense costs and related supplementary payments are paid in addition to the limits of liability.

Study for the ACSR 9 – Workers Compensation and Employers Liability Insurance Test. Engage with multiple choice questions and detailed explanations. Prepare for success!

Multiple Choice

Defense costs and related supplementary payments are paid in addition to the limits of liability.

Explanation:
Defense costs and related supplementary payments are provided outside the policy’s liability limits, meaning they don’t erode or reduce the amount available to pay settlements or judgments. This coverage covers expenses the insurer incurs on the insured’s behalf—such as attorney fees, court costs, and interest on judgments—and includes supplementary items like certain bail bonds and other listed costs. Because these costs are paid in addition to the limits, they don’t come out of the liability limit that applies to the claim itself, helping ensure the insured has defense and related expenses covered even if the claim is significant.

Defense costs and related supplementary payments are provided outside the policy’s liability limits, meaning they don’t erode or reduce the amount available to pay settlements or judgments. This coverage covers expenses the insurer incurs on the insured’s behalf—such as attorney fees, court costs, and interest on judgments—and includes supplementary items like certain bail bonds and other listed costs. Because these costs are paid in addition to the limits, they don’t come out of the liability limit that applies to the claim itself, helping ensure the insured has defense and related expenses covered even if the claim is significant.

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