Two Key Coverages: Bodily Injury vs. Medical Expense
When we talk about liability insurance in the context of outdoor activities, the two terms that often cause confusion are bodily injury and medical expense.
Bodily injury coverage is part of your core liability protection. It pays up to your policy limit (commonly $1,000,000) if you are found legally liable for someone else’s injury.
Medical expense coverage is typically a no-fault coverage with a much smaller limit, usually $5,000. This coverage pays regardless of fault and is designed to quickly resolve minor injuries without involving lawyers.
Why Is Medical Expense Sometimes Excluded?
In many commercial liability policies, especially those tailored to high-risk activities such as equine trail riding or whitewater paddling, medical expense coverage is often intentionally excluded. This means there is no automatic payout for minor injuries, even if someone trips over a paddle or gets thrown from a horse.
But why would a carrier exclude this? Because adventure sports inherently carry risks, providing no-fault payouts could result in a flood of small claims that aren’t tied to actual negligence. By excluding medical expense coverage, the insurance company is essentially saying:
“No free money. Prove legal liability, and then we’ll talk.”
How It Plays Out in Real Life
Let’s say your water sport participant scrapes their leg on a rock while portaging their kayak. If medical expense coverage were included, they could potentially file a quick $2,000 claim and be reimbursed with no questions asked. But when medical expense is excluded, the injured party would need to demonstrate that your business did something legally wrong, like failing to mark a hazardous area or neglecting to provide required safety gear, before a claim would be paid.
Similarly, if a trail rider falls off a horse during a guided trip and breaks their wrist, medical expense coverage might have provided a small payout immediately. However, with the exclusion in place, your policy only kicks in if it can be proven that your team was legally responsible, like pairing an inexperienced rider with a known unpredictable horse.
Understanding Your Coverage: What’s Changed and What Hasn’t
We want to make sure you feel confident in your coverage, especially if you’re new to the world of recreational business risks. One key thing to know is that your bodily injury coverage remains strong, with a $1,000,000 limit still in place.
What has changed is how claims are handled. In the past, even minor injuries, like small bumps or bruises, might have triggered an automatic payout. Now, the process requires the injured party to show that you failed in your duty of care before a claim is paid.
This shift is a good thing for you. It keeps your insurance premiums lower and your claims history cleaner, which can make a big difference over time.
If you have any questions or want to walk through how this works in real-life scenarios, we’re here to help.
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