What is the purpose of Supplementary Payments in conjunction with liability coverage in a BOP?

The purpose of Supplementary Payments in conjunction with liability coverage in a Businessowners Policy (BOP) primarily revolves around expenses that are incurred as a result of defending and investigating claims made against the insured. This includes costs such as attorney fees, court costs, and other expenses that arise during legal proceedings. These payments are additional to the liability limit of the policy and help ensure that the insured can adequately defend themselves without depleting their personal or business resources.

This specific feature is crucial in liability coverage, as defending against a claim can often be as costly as settling the claim itself. Supplementary Payments provide financial support during the claims process, which is essential for the insured to manage their obligations and protect their interests effectively.

The other options focus on different aspects not covered by Supplementary Payments in the context of liability coverage. For example, covering a claimant's lost wages or the cost of additional damage discovered after a settlement are not functions of Supplementary Payments, which are strictly meant for defense and investigation costs. Incidental payments to a claimant before final settlement do not align with the purpose of Supplementary Payments, as they relate more to immediate financial assistance to claimants rather than enabling proper legal defense for the insured.