What is the primary purpose of supplementary payments in a liability policy?

The primary purpose of supplementary payments in a liability policy is to cover legal expenses. These payments are designed to provide additional financial support to the insured beyond the basic limits of liability coverage. When a claim is made against a policyholder, the legal costs associated with defending against that claim can be significant. Supplementary payments help to alleviate the financial burden related to attorney fees, court costs, and other legal expenses that the insured may incur while defending their case.

This feature ensures that the available coverage does not diminish due to legal expenses, allowing the policyholder to focus on their defense without worrying about impacting their liability limits. It is important to note that supplementary payments typically do not have a cap on the maximum limit, making them critical in ensuring comprehensive legal support in liability cases.