It is a type of no-fault coverage for bodily injury. No-fault insurance is designed to be good will coverage in which fault doesn’t have to be proven in order to pay for damages resulting from bodily injury claims. It is designed primarily to protect the insured and insurer against lawsuits for negligence.
Medical payments to others, as the name implies, is not insurance for the policyholder or employees. Employees are always insured through workers compensation.
Similar to medical payments on a homeowner’s policy, this coverage part of the CGL extends certain benefits to a person injured on your premises or as a result of your day-to-day business operations.
These benefits include necessary surgical, medical, and dental services as well as funeral expenses if death results from the claim.
Let’s look at an example:
Imagine you own a furniture store. Perhaps a shopper falls into a glass top table, breaking it and cutting their arm, requiring a trip to the emergency room and fifteen stitches.
Your medical payments coverage would pay for all the expenses incurred as a result of the fall. There is no need to prove you are negligent as the store owner; you would simply file a claim and the insurer would pay for the damages.
But be sure to note in the example above that the insurance company is not acknowledging responsibility for the injury when they extend the benefits.
Additionally, the injured party still retains the right to sue you for negligence and collect benefits by settling out of court or procuring a judgment against you if they choose to. The hope of the insurer (and you) is that the injured party will be satisfied with simply having their medical bills paid.
If you were sued, the claim would be processed under the liability portion of your CGL. The medical payments coverage part of the CGL does not deal with liability.