Canadian Accredited Insurance Broker (CAIB) Three Practice Exam

Why is the Medical Payments coverage under the Commercial General Liability policy provided on a "no fault" basis?

1. It eliminates the need for detailed investigations

2. It reduces the chance of permanent disability from immediate treatment

3. It is a standard practice in all insurance policies

4. It encourages legal disputes over negligence

The correct answer is: It reduces the chance of permanent disability from immediate treatment

The Medical Payments coverage under a Commercial General Liability policy is indeed provided on a "no fault" basis to ensure prompt medical assistance for injured parties, thereby reducing the chance of permanent disability from immediate treatment. This coverage allows for quick payment of medical expenses without the injured party needing to establish negligence or fault on the part of the insured. By doing so, it facilitates immediate financial support for medical care, which can be crucial in preventing more severe health issues and complications that might arise if treatment is delayed while fault is being determined. This proactive approach encourages swift care and can help in maintaining positive relationships between the parties involved. The emphasis on immediate treatment underlines the practical intention behind this coverage, which is to alleviate suffering and potentially mitigate long-term medical costs and liabilities.