If you truly did not have the dog when you bought the house & believe me, the company will investigate this (you may need to prove when you got it & from whom), and you do NOT have a dog or animal liability exclusion on your policy, it would be covered. You need to submit this to your insurance company. If this child was bit in the face or has any permanent scarring, this could be a big lawsuit. If you decide to pay the medical bills yourself, you are on the hook for any payouts awarded in a lawsuit. Don't listen to anyone that tells you to pay a claim with an injury yourself, this is dangerous to do & you are putting all of your assets on the line. I will tell you that your insurance company may request that you put the dog down to renew the policy, even if you do that, they may still not renew your policy. If you have put the dog down, you MAY be able to convince your company to keep you, but, you have not been with them very long (sounds like just a year?), so they have no history with you so it could be an uphill battle. If you are nonrenewed, you will have a very hard time finding other homeowners insurance due to this claim, even if you put the dog down. Good luck to you.