Supplementary Payments in liability policies are:

Supplementary payments in liability policies refer to additional benefits provided beyond the standard liability limits. These payments are designed to cover various expenses that may arise during the response to a liability claim. They typically include costs such as legal fees, court costs, and other necessary expenses incurred in the defense of a claim against the insured. Therefore, the correct understanding is that these payments are made in addition to the coverage limits established in the policy, enhancing the support for the insured without reducing the primary coverage amount.

This distinction is crucial since it emphasizes how supplementary payments can help manage financial exposure more effectively while the main liability coverage limits remain intact to address any potential settlements or judgments.