Medical Expenses (Med Exp)

Overview

Medical Expenses — commonly labeled Med Exp on the ACORD 25 — is a narrow, no-fault coverage embedded in most Commercial General Liability policies. It pays reasonable medical bills incurred by a third party (not an employee) who is accidentally injured on premises the insured owns, rents, or uses, or as a result of the insured's operations.

The central feature of Med Exp is that it pays without a finding of liability. If a customer trips in a shop and twists an ankle, the insurer can settle the ER bill from Med Exp even when the insured did nothing wrong. This speed of settlement is designed to prevent small incidents from escalating into Bodily Injury lawsuits.

Med Exp is considered a "goodwill" coverage. It is not a replacement for Bodily Injury — it is a small cushion intended to defuse minor claims before they mature into contested litigation.

How It Works

When a covered incident occurs, the injured party (or the provider who billed them) submits receipts directly to the insurer. The insurer evaluates whether:

1. The injury occurred on premises the insured owns or controls, or arose from the insured's operations.
2. The medical services were incurred within the policy's reporting window — typically one year from the date of the accident.
3. The expenses are reasonable — ER visits, ambulance, X-rays, follow-up orthopedic care.

Payments made under Med Exp generally do not erode the Each Occurrence Limit for Bodily Injury — they run against the separate Medical Expense sub-limit. However, if a claimant later files a liability suit and recovers damages, any Med Exp already paid is typically credited against the Bodily Injury settlement.

Example: A customer slips in a retail store and sustains a mild concussion. The store's carrier pays $4,200 under Med Exp for the ER visit and two follow-ups, no lawsuit filed. The Bodily Injury limits remain untouched.

Common Limits

Med Exp limits are small and highly standardized across the market — they rarely vary by industry:

The limit is per person, not per occurrence — each injured party has their own $5K or $10K available.

On the COI / Where it appears on ACORD 25

Med Exp appears in the General Liability coverage row of the ACORD 25, in the limits column, labeled MED EXP (Any one person). It is typically the third limit listed, between DAMAGE TO RENTED PREMISES and PERSONAL & ADV INJURY.

Certificate reviewers should note that an absent or zero Med Exp limit may indicate a stripped-down policy intended for high-risk operations where carriers refuse first-aid coverage.

Why It Matters for Compliance

• Low contract leverage, high diagnostic value: Most insurance requirement clauses do not specify Med Exp limits, but an unusually low or zero figure can flag a bare-bones policy that may also lack Additional Insured status or Waiver of Subrogation.
• Phantom coverage signal: In Inori's extraction guard, a GL row marked has_coverage: true with med_exp: null alongside other null limits triggers the phantom-coverage heuristic — a likely indicator that the COI was partially fabricated or copied from a stale template.
• Claim-severity indicator: During vendor onboarding, a consistent $10K Med Exp across a vendor's policy history suggests a standard-market carrier; $5K with heavy exclusions suggests non-admitted or surplus lines placement, which may require additional review.

Related Concepts

Med Exp is closely related to Bodily Injury (the liability-based equivalent) and is sometimes referred to as Medical Payments coverage. It operates alongside the Each Occurrence Limit but is drawn from its own sub-limit pool. On the General Liability dec page, Med Exp sits among five standard sub-limits that together define a CGL's coverage envelope.