Introduction

Claim expenses

First aid expenses

Damage to property of others

Loss assessment

Introduction

Four additional liability coverages are included in the ISO homeowners forms. The coverages are “additional,” in that they are not included within the insured's section II limit of liability. These are claims expenses, first aid expenses, damage to property of others, and loss assessment. 

Claim Expenses

A.Claim Expenses

      We pay:

1.Expenses we incur and costs taxed against an “insured” in any suit we defend;

2.Premiums on bonds required in a suit we defend, but not for bond amounts more than the Coverage E limit of liability. We need not apply for or furnish any bond;

3.Reasonable expenses incurred by an “insured” at our request, including actual loss of earnings (but not loss of other income) up to $250 per day, for assisting us in the investigation or defense of a claim or suit; and

4.Interest on the entire judgment which accrues after entry of the judgment and before we pay or tender, or deposit in court that part of the judgment which does not exceed the limit of liability that applies.

Analysis

Payment under this additional coverage is tied to the second item of the liability coverage, i.e., the provision requiring the insurer to provide a defense for liability claims covered by the policy. The liability insuring agreement also exempts the insurer from further responsibility for defense once the limit of liability has been exhausted by payment of claims. When this occurs the coverage under additional coverage 1. also ends, as all of the expenses payable under this item are related to claims or suits that the insurer must defend.

The amount paid for loss of earnings and reasonable expenses incurred by an insured is $250 per day. The expenses must have been incurred by an insured while in the course of assisting the insurer in the investigation or defense of a claim or suit. Actual loss of earnings is covered, not potential loss of earnings. An insured cannot argue she would have made a killing on Wall Street if only she had been at work, and expect to be reimbursed.

First Aid Expenses