Is my 3 year old son responsible for an accident that happened in the neighborhood?

My 3 year old son was playing with a group of kids in the neighborhood. They were playing with plastic swords and he accidentally hit another child in the mouth, chipping his tooth. His parents obviously feel we're responsible to pay all dental and medical bills. I'm willing to pay some money, but wondering what we're legally obligated to do, if anything? Absolutely no malicious intent. This did not happen on our property, whether that matters or not. We do have homeowner's insurance.
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You may be found responsible for paying some on the bills but since it was a 3 year old and only playing the courts may rule that you aren't responsible at all. They could however find the adult responsible that was suppose to be supervising such young children at fault for some of it. It is really hard to say how the judge will rule and really depends on witness testimony and evidence in the case. I would either have an agreement wrote up stating a set amount you will pay them and see if they will sign it (have it notarized) if they will not sign and agreement then i would just have it go to court and see what happens. If it was just an accident (I have two boys I know accidents happen) then there is no reason for your to have to pay all the bills and sounds more like they just want someone else to have to pay. I know with having my boys and being around other children things happen. My son had his tooth chipped too by another kid while they were wresting around but I didn't go after the parents because I know accidents happen.
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