Coverage is triggered by bodily injury caused by an accident on premises the named insured owns or rents or ways next to such premises or because of the named insured's operations, provided that the accident takes place in the coverage territory and during the policy period. In addition, expenses have to be incurred and reported to the insurance company within one year of the date of accident. Coverage is available regardless of fault. Several exclusions further define coverage, as discussed below.

Topics covered:

Insuring agreement

Trigger and other requirements

Exclusions

Insuring Agreement 

a. We will pay medical expenses as described below for "bodily injury" caused by an accident:

(1) On premises you own or rent;

(2) On ways next to premises you own or rent; or

(3) Because of your operations provided that:

(a) The accident takes place in the "coverage territory" and during the policy period;

(b) The expenses are incurred and reported to us within one year of the date of the accident; and

(c) The injured person submits to examination, at our expense, by physicians of our choice as often as we reasonably require.

b. We will make these payments regardless of fault. These payments will not exceed the applicable limit of insurance. We will pay reasonable expenses for:

(1) First aid administered at the time of an accident;

(2) Necessary medical, surgical, x-ray and dental services, including prosthetic devices; and

(3) Necessary ambulance, hospital, professional nursing and funeral services.

Analysis

The medical payments insuring agreement contains the insurer's promise to pay medical expenses for bodily injury caused by an accident. Bodily injury has the same meaning as elsewhere in the CGL coverage part: "bodily injury, sickness or disease sustained by a person, including death resulting from any of these at anytime." The requirement that the injury be "caused by an accident" is not elaborated on in the policy provisions, but is generally understood to mean that the event causing injury can be traced to a definite time and place, and that the injury was not expected or intended from the insured's or the injured person's point of view.

To illustrate the latter point, say that the named insured is a merchant at whose going-out-of-business sale two customers disagree over who can buy the last pair of designer jeans in their mutual size. If one of the customers settles the argument by suddenly and without warning striking the other customer, the resulting injury will have been no accident from the viewpoint of the customer doing the striking. From the viewpoint of the injured customer, however, the injury will have been quite unexpected and unintended and therefore accidental. The fact that the customer was injured by an intentional act of another person should not stand in the way of medical payments coverage.

This rule of policy interpretation is aptly expressed as follows in the North Carolina case of Nationwide Mut. Ins. Co. v. Roberts, 134 S.E.2d 654 (N.C. 1964): "When an insured is intentionally injured or killed by another, and the mishap is as to him unforeseen and not the result of his own misconduct, the general rule is that the injury or death is accidentally sustained within the meaning of the ordinary accident insurance policy and the insurer is liable therefore in the absence of a policy provision excluding such liability."

The insuring agreement goes on to state that medical payments coverage applies to injuries that take place on premises that the named insured owns or rents; on ways next to such premises; or because of the named insured's operations. The third item makes it clear that coverage applies to accidents that occur away from the named insured's premises, as long as the injuries result from the named insured's operations. However, the coverage for accidents taking place on the insured's premises or on the ways next to them is broader than that which applies elsewhere, since there is no requirement, with respect to such premises, that the injury must result from the named insured's operations. If, for example, a child is injured while trespassing on the insured's grounds after the insured's regular business hours, and even if the injury results from something other than the insured's operations, such as the child tripping over his own toy, medical payments coverage can still apply to the child's injuries.

Trigger and Other Requirements

Another requirement set forth in the insuring agreement is that the accident must take place in the coverage territory and during the policy period. The meaning of coverage territory is discussed elsewhere in the Public Liability section of the Casualty & Surety Volume. The requirement that the accident must take place during the policy period in order for coverage to be triggered under that policy is essentially the same as the occurrence trigger that applies to coverage A of CGL coverage form CG 00 01, which requires that the bodily injury or property damage must occur during the policy period. The occurrence trigger applies to medical payments coverage even if the policy provides coverage A (liability) on a claims-made basis. Thus, there is always the possibility, when the insured's liability coverage is claims-made, that a medical payments claim and a liability claim arising out of the same accident could be covered under different policies of the insured.

To illustrate, say that an injury occurs late in 2011. The injured person makes a claim in early 2012, after a renewal policy is in effect. Any medical payments claim will be covered under the 2011 policy, because the accident took place in 2011. However, a related liability claim first made against the insured in 2012 could be covered under the renewal policy that is in effect at the time of the claim, depending on the retro date.

In order to be covered, expenses must be incurred and reported to the insurer within one year of the date of the accident. In previous medical payments forms, it has only been required that the expenses be incurred within the stipulated time period. Now, apart from the initial reporting of the accident, the expenses must be reported to the insurer within one year after the accident.

The insuring agreement also requires the injured person to submit to examination, by physicians of the insurer's choice, as often as the insurer reasonably requires. Of course, the insurance company agrees to bear the expense for such examinations.

A statement that medical payments shall not exceed the applicable limit of insurance is also in the insuring agreement. The limit for medical payments coverage is an amount stated in the declarations that applies to each person. This coverage is also subject to the general aggregate limit of the policy. That is, if the general aggregate limit is exhausted by claims under coverages A or B of the policy, the insurer will have no further obligations under coverage C, even if no other medical payments claims have been presented during the policy period. (The products-completed operations aggregate limit has no applicability to medical payments coverage, simply because the medical payments coverage flatly excludes bodily injury within the products-completed operations hazard.)

The types of medical expenses that the insurer will pay are listed in the policy as follows: first aid that is administered at the time of an accident; necessary medical, surgical, x-ray and dental services, including prosthetic devices; and necessary ambulance, hospital, professional nursing and funeral services.

With the exception of the first item, the types of expenses listed as being covered are the same as in previous medical payments forms. The addition of the first item, concerning first aid expenses, seemed to be intended to compensate for the fact that the 1986 CGL coverage forms did not provide first aid coverage as a supplementary payment, a benefit that is provided in addition to policy limits under the 1973 general liability policy. In the 1986 CGL forms and in the current forms, first aid at the time of an accident is covered under medical payments only, and therefore subject to policy limits. However, should medical payments coverage be excluded (through endorsement CG 21 35 10 01), the policy's supplementary payments are amended to include expenses incurred by the insured for first aid to others at the time of an accident for bodily injury to which the insurance applies.

Exclusions

 We will not pay expenses for "bodily injury":

a. Any Insured

     To any insured, except "volunteer workers".

b. Hired Person

     To a person hired to do work for or on behalf of any insured or a tenant of any insured.

c. Injury On Normally Occupied Premises

     To a person injured on that part of premises you own or rent that the person normally occupies.

d. Workers Compensation And Similar Laws

     To a person, whether or not an "employee" of any insured, if benefits for the "bodily injury" are payable or must be provided under a workers compensation or disability benefits law or a similar law.

e. Athletics Activities

     To a person injured while practicing, instructing, or participating in any physical exercises or games, sports, or athletic contests.

f. Products-Completed Operations Hazard

     Included within the "products-completed operations hazard".

g. Coverage A Exclusions

     Excluded under Coverage A.

Analysis

The coverage C provisions contain only seven exclusions. The small number of exclusions in comparison with the number in earlier forms is facilitated by exclusion (g), which applies to any bodily injury claim excluded under coverage A. (The coverage A exclusions are discussed elsewhere; see CGL Coverage Forms—Coverage A). Another exclusion having broad application is (f), which eliminates coverage for bodily injury included within the products-completed operations hazard, a defined term.

Exclusion (a) applies to bodily injury "to any insured," a feature that sets premises and operations medical payments coverage apart from automobile medical payments coverage, which primarily covers injury to the named insured and other insured persons. Formerly, premises and operations medical payments coverage excluded injury to the named insured (or any partner therein) only. The current exclusion is broader in that it could apply, for example, to the spouse of a partner in an insured partnership, who, even though not the named insured, is nevertheless an insured.

The CGL form notes that volunteer workers are excepted from this exclusion. Volunteers are now considered as insureds while performing duties related to the conduct of the named insured's business. If the exception had not been put into place, volunteers would not have been eligible for medical payments. After all, the volunteer is donating his time and efforts (no compensation) to help the named insured, and it would not be fair to expect the volunteer on his own to pay for his injuries received on the insured's premises or while working for the insured. And, if the volunteer were to be forced to pay on his own for medical services or first aid, how long would he continue to volunteer?

Exclusion (b) excludes bodily injury "to a person hired to do work for or on behalf of any insured or a tenant of any insured." If, for example, an insured or his tenant hires a contractor to do some work, medical payments coverage does not apply to any injuries sustained by the contractor if he were to be injured on premises owned by the insured.

Exclusion (c) applies to bodily injury "to a person injured on that part of premises you own or rent that the person normally occupies." The exclusion is aimed at injuries of the named insured's tenants. However, the exclusion only applies to injuries that take place on the part of the premises that the tenant normally occupies. If, for example, a tenant of the named insured's apartment building is injured in the common area such as the parking lot, the exclusion does not apply.

Exclusion (d) applies to bodily injury "to a person, whether or not an employee (a term defined as including leased workers) of any insured, if the benefits for the 'bodily injury' are payable or must be provided under a workers compensation or disability benefits law or a similar law." This exclusion is broader than the workers compensation exclusion under coverage A, because it applies to any person, whether or not an employee of any insured, whereas the coverage A exclusion applies only to obligations of the insured under a workers compensation or similar law. The coverage C exclusion, for example, could apply to a delivery man who is injured on the insured's premises, for whom the insured has no workers compensation obligation. If the delivery man's injuries are compensable under workers compensation (the obligation to provide these benefits falling upon the delivery man's employer), there will be no medical payments coverage under the insured's policy.

Exclusion (e) applies to bodily injury to a person injured while taking part in athletics activities. A question often arises as to what this exclusion encompasses. Does the athletic activity have to be one wherein the participant is trained and has the required strength, agility, and stamina to compete as an athlete? Or does the exclusion refer to any activity that requires some athletic exertion on the part of the participant? The wording of the exclusion means that any participation in any physical exercise or game or sport or athletic contest precludes the participant from receiving med pay coverage. For example, if the insured sponsors a semi-professional baseball team and one of the players is injured during a game, the med pay exclusion applies. If the insured sponsors a local T-ball team and one of the children is injured during a game, the med pay exclusion applies. If the insured is having the company picnic on company grounds and a child or a spouse or a friend of an employee is injured while playing basketball or softball, the med pay exclusion applies. The exclusion is intended to apply to anyone participating in any kind of athletics, period; such coverage should be handled by a person's own health insurance.

Exclusion (f) applies to bodily injury that is included within the "products-completed operations hazard"; this term is defined in the CGL policy. What the exclusion means is that there is no med pay coverage for bodily injury occurring away from the premises owned or rented by the named insured and arising out of the named insured's product or work. At first glance this seems to contradict the coverage for med pay that applies to injuries because of the named insured's operations. However, a closer look at the definition of "products-completed operations hazard" shows that the term does not include products that are still in the physical possession of the named insured or work that has not yet been completed or abandoned. So for example, if the insured is building a patio for a customer and he accidentally drops a brick on the customer's foot, the exclusion will not apply since the work has not been completed. On the other hand, if the insured has finished building a retaining wall for a customer and two weeks later, a brick falls out of that wall onto the customer's foot, med pay coverage is excluded.

Exclusion (g) applies to bodily injury excluded under coverage A. This is a rather comprehensive exclusion and reference has to be made back to the exclusions listed under coverage A of the CGL form in order to grasp this exclusion's scope. For example, there is no coverage for injury arising out of the use of an auto or aircraft under coverage A; so there is no med pay coverage either. There is no coverage for injury due to causing or contributing to the intoxication of any person under coverage A; the same is true for med pay coverage.