08. Liability and Law Flashcards
Statutory Law
based on written laws (i.e. state legislature)
- statutory law governs the authority of common law
Common Law
based on court decisions and customs when statutory law does not provide an answer
Tort
Any civil wrongdoing, whether intentional or unintentional
Tort Law
The body of law that addresses and provides remedies for any civil wrongdoing performed on another party
Criminal Case vs. Civil Case
Criminal Case
- the state charges an individual
- 100% of the jury must agree the charge has been proven
Civil Case
- one individual charges another
- 51% of the evidence must favor the plaintiff’s case
Plaintiff
The person who suffered injury or damage; also known as the claimant
Tortfeasor
The person accused of committing a tort, otherwise known as the defendant
Joint Tortfeasor
A group of two or more persons accused of committing a tort
Jurisdiction
The authority of a court or judge to hear a case and to make a judgement
Judicial District
The designation of a geographic area over which a particular court has jurisdiction
Intentional Tort
A premeditated act that causes injury to a third party
Negligent Tort
A negligent act that causes unintentional injury to a third party
Complaint
When a claimant filed a lawsuit against a policyholder for damages the policyholder caused
How to answer a complaint
The Tortfeasor, or defendant’s, response to the complaint can be one of the following
- I accept the complaint and will pay for damages
- I deny the complaint
- I accept the complaint with a right to insert evidence into the case
Default Judgement: if the defendant fails to answer the plaintiff’s complaint, and does not appear in court, the result will be a default judgement in favor of the plaintiff.
Duties of the Insured
When taken to court, the policyholder must:
- alert the insurer
- forward all information regarding the matter to the insurer
- cooperate with insurer and adjuster in all matters related to the court case
Insurer’s Obligations
When a policyholder is taken to court, the insurer must:
- defend the policyholder
- pay any legal expenses that are incurred at its own request
Reservation of Rights
When the circumstances of a lawsuit or a claim may not be covered under the policy, the insurer will issue a Reservation of Rights
- gives the insurer time to investigate its obligations
- allows the insurer to stop defending the policyholder or deny a claim if it finds that the case is not covered
- gives the policyholder fair warning if she gs to prepare her own defense
Necessary Elements of a Reservation of Rights
the letter must:
- include the insurer’s name, the policy number, and the event or loss
- clearly and concisely explain the situation, especially that the policyholder may not receive compensation or may have to defend himself in court
- inform the policyholder about potential consequences ( i.e. he might have to reimburse the insurer for expenses it has already paid )
Non-Waiver Agreement
- also used when the insurer thinks coverage may not apply to a claim
- allows insurers to keep its right to deny coverage
- must be signed by the policyholder (but the insurer may not force a policyholder to sign)
Damages
Monetary compensation for financial loss or injury awarded to a plaintiff by civil court
Compensatory Damages
Money awarded for tangible and intangible economic loss
two types of compensatory damages
- special
- general
Special Damages
Compensatory damages awarded for tangible losses with a quantifiable value
- proven by providing medical bills, repair bills, etc.
General Damages
Compensatory damages are determined by the court and awarded for tangible, emotional losses that are not quantifiable
losses with subjective value include:
- expected future losses
- mental anguish
- permanent injury
- loss of reputation
- pain and suffering
- future losses due to unemployment
Punitive Damages
Money rewarded to punish egregious misconduct
- for intentional acts, such as slander, fraud, violence, oppression, or recklessness
- not typically covered in liability insurance
