Med Pay Coverage Obligation to Claimant

Under the CGL med pay coverage, is there a contractual obligation between the insurer and the claimant to pay out the limit of the medical payments coverage when the required documentation has been submitted to the insurer? Or, does the insurer have the right to deny the payments if it believes there is no liability on the part of the insured? Finally, can the insurer require the claimant to sign a release for the payments made under the med pay coverage?

Nevada Subscriber

The med pay coverage in the CGL form is part of the insurance contractual agreement between the insured and the insurer. A third party claimant is not part of that contract and so, there is no contractual obligation between the insurer and the claimant.

Med pay coverage is not based on the liability of the insured. The insurer has declared in the med pay section of the policy that the payments will be made regardless of fault. Med pay is something like goodwill in that the insurer can pay the medical expenses of an injured person all the while hoping to prevent any future lawsuit over the injuries.

As for a release, the insurer can try to get the claimant to sign one, but there is no requirement in the policy that would force the injured person to sign a release. We are not aware of any requirement in state law on this matter either, but you may want to check with an attorney who is familiar with the law in your jurisdiction to verify this point.

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