In liability policies, what is the difference between medical payments coverage and liability coverage?

Medical payments coverage and liability coverage serve distinct purposes within liability policies. Medical payments coverage is designed to cover medical expenses incurred by individuals who are injured on the insured party's property, regardless of who is at fault for the incident. This means that even if the insured is not negligent or responsible for the injury, the medical payments coverage will pay for the injured party's medical bills up to the specified limit. This no-fault aspect allows for swift reimbursement of medical costs, promoting a more immediate resolution for injured parties.

On the other hand, liability coverage requires proving that the insured is at fault for the injury or damage before benefits are paid. This type of coverage comes into play in situations where negligence or misconduct is established. As a result, liability coverage does not provide immediate financial support without a determination of fault, contrasting sharply with the no-fault provision of medical payments coverage.

The other options do not accurately describe the difference between these two types of coverages. Mediation of disputes is a conflict resolution process, not a coverage type. Liability can arise in various circumstances beyond negligence, such as strict liability. The limits of medical payments and liability coverage can also differ, as they are established separately by the policy terms and conditions.