1-L Liability & Law Flashcards
Statutory Law:
based on written laws (e.g. state legislature)
Note: Statutory Law governs the authority of Common Law.
Common Law:
based on court decisions and customs when statutory law does not
provide an answer.
Adjusters will consider both _____ and common law principles when working on liability claims.
statutory law
Common law, therefore, can vary according to_______
jurisdiction
While statutory and common law are used in both criminal and civil court, ______ cases are only addressed in civil court.
liability
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
● 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
Tort law uses both statutory law and _____ law when addressing issues of legal liability.
common
With tort law, _______ location helps determine which jurisdiction is applicable. A case is often held where the involved parties live and do business.
geographic
Jurisdiction
The authority of a court or judge to hear a case and to make a judgement
Judicial District
A designated area over which a particular court has jurisdiction
Plaintiff
The party who suffered injury or damage; also known as the claimant. This could also be an heir, an assignee or an estate.
Tortfeasor
The party accused of committing a tort, otherwise known as the defendant
Joint Tortfeasor
A group of two or more parties accused of committing a tort
Intentional Tort:
An intentional act that causes injury to a third party
Intentional Tort Example
OJ Simpson was sued in a civil court for the intentional torts of battery and wrongful deaths of Nicole Brown and Ronald Goldman.
Negligent Tort:
A negligent act that causes unintentional injury to a third party
Negligent Tort Example
Beth was severely injured by a faulty tool that she borrowed from Lisa. She could sue Lisa in a civil court for a negligent tort.
2 types of Tort
- ) Intentional Tort
2. ) Negligent Tort
Although tort law includes both intentional and unintentional acts of wrongdoing, remember: _____ insurance only covers unintentional acts, or negligent torts.
liability
Complaint:
When a claimant files a lawsuit against a policyholder for damages the policyholder caused.
Answer:
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 Judgment:
If the defendant fails to answer the plaintiff’s complaint, and does not appear in court, the result will be a default judgment in favor of the plaintiff.
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
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 is issued when:
the circumstances of a lawsuit or a claim may not be covered under the policy
● 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 has 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 (e.g. 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 the insurer to keep its right to deny coverage
● Must be signed by the policyholder (but the insurer may n ot force a
policyholder to sign)
Claimant =
Plaintiff
Policyholder = Tortfeasor =
Defendant
Damages:
Monetary compensation for financial loss or injury awarded to a plaintiff by civil court
Categories of harm/losses:
● Physical
● Financial
● Physical & financial
● Emotional or reputational
Two main types of damages:
● Compensatory
● Punitive
Compensatory Damages:
Money awarded for tangible and intangible economic loss
Two types of Compensatory Damages
● Special
● General
Diminution of Value:
● Total amount of all damages resulting from an occurrence
● Legal term used in calculating compensatory damages
Special Damages:
Compensatory damages awarded for tangible losses with a quantifiable value
● Proven by providing medical bills, repair bills, etc.
Special Damages Example
● Medical bill for an accident that caused a broken leg: $5,000
● Repair bill for damages caused by fire: $3,000
General Damages:
Compensatory damages are determined by the court and awarded for intangible, 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 awarded to punish egregious misconduct
● For intentional acts, such as slander, fraud, violence, oppression, or recklessness
● Not typically covered in liability insurance
Liability Laws
● The Statute of Limitations ● The Wrongful Death Act ● Workers’ Compensation ● Automobile No-Fault Laws ● Breach of Product Warranty ● Waiver of Sovereign Immunity
Statute of Limitations:
A law limiting the amount of time an injured party has to file a complaint after an occurrence
Discovery Rule:
Statutes of limitations usually run from when an injury is, or should have been, discovered
Wrongful Death Act:
Law that defines the rights of individuals who are associated with someone who was killed because of a negligent act
Plaintiffs may sue for damages such as:
● Loss of companionship
● Loss of income
● Pain and suffering
Sovereign Immunity:
Law that restricts people from suing governmental entities
Waiver of Sovereign Immunity:
Law that allows individuals to sue governmental entities for damages in certain cases.
Workers’ Compensation Laws:
Restrict an employee’s right to sue his or her employer for injuries that occurred on the job
Automobile No-fault Laws:
Restrict an individual’s right to sue the driver of a motorized vehicle
Product Warranty:
A manufacturers’ guarantee ensuring the quality of its products
Breach of Product Warranty:
If a product is not suitable for its intended purpose and causes injury or damage, the manufacturer is considered strictly liable and may be sued by the consumer
Breach of Product Warranty Example
A toy manufacturer who fails to meet standard safety regulations regarding age- appropriateness may be sued for “breach of product warranty” because the quality is not suitable for young children.
