What amount will XYZ Furniture pay out-of-pocket if Grace is awarded $300,000 and legal defense costs are $45,000?

To determine the out-of-pocket amount XYZ Furniture will have to pay if Grace is awarded $300,000, we need to consider the terms of a typical liability insurance policy, which often includes a limit on coverage as well as any deductibles that might apply.

In this scenario, it appears there is an award of $300,000 against XYZ Furniture, and they have incurred $45,000 in legal defense costs. However, the out-of-pocket amount reflecting what XYZ Furniture must pay is influenced by the insurance policy's coverage limits and any applicable deductibles. Considering a common insurance structure, it is plausible that the insurance policy might only cover a portion of the awarded amount or that a deductible exists that XYZ Furniture would have to meet before any insurance payout.

If we look at the components of the total costs, the $300,000 award would be the primary liability that needs addressing. If the policy includes coverage but leaves a significant portion for the insured to handle, it is quite possible that XYZ Furniture would be responsible for the portion that exceeds either the coverage or the deductibles. If we assume there is a deductible close to the awarded amount or a lack of coverage for the full amount, this would sensibly lead to a calculation indicating that the out