In a liability policy, which of the following is NOT considered a "supplementary payment"?

In a liability policy, supplementary payments are designed to cover additional costs that may arise during the defense and settlement of a liability claim, beyond just the payment for damages. The supplementary payments help an insured party manage the financial impact of legal proceedings.

The identified correct answer, the negotiated settlement, does not fall under supplementary payments. Settlements typically represent the amount offered to resolve a claim and are part of the overall liability coverage limits specified in the policy. Essentially, the negotiated settlement is the outcome of the claims process, rather than an additional expense incurred in defense of a claim.

On the other hand, pre- and post-judgment interest is a type of supplementary payment as it compensates for the time value of money during litigation. Similarly, the insured's travel expenses may be covered as supplementary payments because they are directly related to the defense of the claim. Appeal and bail bonds also qualify as supplementary payments, as they are necessary expenses incurred to secure the insured's rights during the appeals process or to release them from custody pending trial.