What additional benefits do Supplementary Payments provide in liability contracts?

Supplementary Payments in liability contracts enhance the coverage provided beyond the standard limits of the policy. Specifically, they cover additional costs incurred while handling a claim, which can include items like legal defense costs, court costs, and other related expenses. These payments are generally not subject to the policy's liability limits, meaning they are paid in addition to the base policy limits, thereby offering financial relief to the insured when facing liability claims.

In this context, the focus on "extra coverage above the insured's limit for expenses" accurately reflects the purpose of Supplementary Payments. They ensure that the insured does not have to deplete the liability limits for necessary expenditures in the event of a claim. This feature helps protect the financial interests of the policyholder and supports a more robust defense against claims.

The other options discuss benefits that do not align with the definition of Supplementary Payments. For instance, medical payments and property damage coverage fall under different provisions of liability insurance rather than Supplementary Payments. Similarly, protection for uninsured motorists pertains to a separate aspect of auto insurance that is not addressed by Supplementary Payments. Lastly, punitive damages are generally not covered under standard liability policies or Supplementary Payments, as these often fall outside the standard risk transfer element of insurance.