Most if not all liability insurance policies have clausesdealing with supplementary payments: the standard Business Autopolicy (BAP), Personal Auto policy (PAP), and General Liabilitypolicy all contain supplementary payments sections.
The standard Homeowners' policy has its claim expensesprovisions, which contain few or no controversial words or phrasesthat cause major coverage disputes.
The first provision in the supplementary payments clause statesthat the insurer will pay the expenses it incurs (note that thestandard PAP puts this provision last). This seems reasonablebecause the insurer not only has the duty to defend the insuredagainst covered liability claims, but also takes upon itself theright to settle any claim or lawsuit that is filed against theinsured. This duty involves expenses, for which the insurer shouldbe responsible.
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