In liability policies, what do Supplementary Payments typically cover?

Supplementary Payments in liability policies are designed to provide additional coverage beyond the basic limits for bodily injury and property damage liability. Specifically, they cover defense costs associated with legal proceedings, which includes attorney fees and court costs that an insurer pays on behalf of the insured. Furthermore, these payments may cover other related expenses, such as the cost of bail bonds, the cost of interim loss of earnings due to attending court, and certain expenses incurred by the insured at the insurer's request.

This aspect of the policy is crucial, as it emphasizes the insurer's commitment to defend the insured against claims and ensure they have proper legal representation without diminishing the core policy limit. In contrast, the other options focus on components of coverage that do not fall under the category of Supplementary Payments: property damage claims are typically considered part of the primary limits of liability coverage, premiums are the costs the insured pays to maintain coverage, and deductibles represent the out-of-pocket costs the insured is responsible for before the insurance coverage kicks in.