Chapter 4 Personal Liability Insurance Flashcards
Criminal Law
- Criminal Code of Canada
- A system of punishment for wrongs against society
- Assesses penalties
Civil Law
- Settle disputes between individuals/legal entities
* Goal: compensation for damages
Common Law
- Decisions are based on the rule of precedent (case law)
* Influenced by prior court cases with similar circumstances
Statue Law
- Derived from bills introduced into parliament
* Overrides common law precedent dealing with same matter
Small Claims Court
Matters under $25,000
County or District Courts
Matters over the small claims court limit
Supreme Court
Provincially – this is an appeals court
Federally – deals with constitutional matters
Contract Law
• Ensures proper performance of contract terms
tort
a wrongful act which has negligently caused damage
or injury to another. This wrongful act may be an intentional act, a negligent act, or a failure to act.
Tortfeasor
a person who commits a wrong against an
innocent party
• Joint Tortfeasor
—where there is more than one person who commits a wrong against an innocent party
Three elements of torts
Duty Owed
Duty Breached
Damages suffered as a result of defendant’s actions (proximate cause)
Intentional Torts
- Where the tortfeasor knew it was illegal before the wrong was committed.
- Liability insurance policies do not pay for injury or damage intentionally caused
Unintentional Torts
- Careless/negligent actions result in a wrongdoing,
* Referred to as a tort of negligence.
Negligence:
“the omission to do something which
reasonable person would do or doing something which a reasonable and prudent person would not do.”
Res Ipsa Loquitur
“the thing speaks for itself”
Strict Liability
guilty until proven innocent
Reasonable activity in an unreasonable setting
Dangerous things & Hazardous Activities
Liability in Statute
Occupiers Liability Act
Highway Traffic Act
The Insuring Agreement
“The insurer agrees to pay all sums which the insured
shall become legally obligated to pay to third parties as compensatory damages to a third party. It must be
caused by an occurrence, it must occur during the policy period, and it must take place in the coverage territory.”
Insuring agreement - Bodily Injury
Physical injuries sustained and associated with
external causes.
Includes injury caused by sickness or disease.
Includes death resulting from any such injury at
any time
Insuring agreement - Property Damage
Unintentional damage to the property of others
Physical injury to tangible property
Loss of use of such property
Insuring agreement - Compensatory Damages
Damages that are intended to compensate the plaintiff
for the injury or damage caused by the defendant
Special – out-of-pocket expenses which are proven by
a receipt or other documentation
General – Difficult to quantify such as pain and
suffering, loss of future income, and loss of enjoyment
of life
Insuring agreement - other types of damages not covered
Punitive – designed to punish
Exemplary – designed to set an example
Nominal – designed to determine who is right & wrong
These are not compensatory; therefore, not covered
Trespassers
- On the premises without the expressed or implied permission of the occupier.
- Must not set traps, or intentionally cause harm to the trespasser.
Licensee (n/a in BC, AB, ON, NS)
- On the premises for own purpose, with occupier’s consent.
* Must protect from known traps and dangers
Invitee (n/a in BC, AB, ON, NS)
- On premises due to invitation, with connection of the owner’s business, with the occupier have a material interest in the matter.
- Protect from dangers that may be discovered.
Visitor: applicable in BC, AB, ON, NS
- Anyone entering the premises except a trespasser.
- Occupiers Liability Act applies: duty to take reasonable care to ensure all visitors are reasonably safe in using the premises.
Children
• Children lack mature judgement needed to avoid risk and must be
protected.
• Premises are to be kept safe from any danger whatsoever.
Neighbours and Passers-by
- Actual use of the property,
* Maintenance of buildings.
Liability for Animals
Farm Liability Act
Failure to Maintain Fences
Domestic Animals
No free first bite!
Wild Animals
Zoos, pet stores
Owners are strictly liable for
injuries/damages
Liability of Children
Children are responsible for their actions unless proven they were incapable of understanding the consequences of their actions.
Parents generally are not responsible for children liability, unless:
• Parent’s failed to properly supervise and control child’s activities,
• Injury or damage was caused by a dangerous things or animals
relinquished by the parents to control of the child,
• Injury or damage caused by a child acting on authority of parents,
• Injury or damage arose out of employment in parent’s business
Landlord is not responsible for ensuring building/land rented is fit for its purpose of renting unless;
They specifically warrant the fitness for
such purpose
They conceal any adverse conditions
Landlord is responsible for building and land rented when:
Rental of furnished premises Landlord has contracted for maintenance and fails with reasonable notice Buildings with multiple tenants—common areas
Two or more persons acting negligently are
considered joint tortfeasors, and each may be held liable forthe entire amount:
Allows innocent victim to be compensated, even if amount of liability is disputed between tortfeasors
Each tortfeasor will generally agree to pay equal share of damages, and then take steps to resolve their own dispute
Occupiers of property are not liable when the damage is due to the negligence of an independent contractor if:
The occupier exercised reasonable care in the
selection of the independent contractor,
Was reasonable that the work the contractor
was engaged should have been undertaken.
Exceptions to Independent Contractors Liability
The work is inherently dangerous
Injury/damage results from defective fixtures,
machinery or equipment supplied by the occupier
The occupier controls the manner in which the
work is to be done
Coverage E - Personal Legal Liability
• Minimum $1Million liability
Coverage F - Voluntary Medical Payments
• $5000
Coverage G - Voluntary Payment for Damage to Property
• $1000
Coverage H – Voluntary Compensation for Residence Employees
• As per schedule
• Persons Insured is the same as the property section, but extended to include:
A person or organization legally liable for an animal or watercraft owned by the insured (except businesses)
A residence employee using a motorized vehicle in the course of performing their duties (lawnmowers)
Legal representative after the death of the insured (maintenance of property)
Any person residing the in the household after the death of the insured
Liability coverage extends to the following locations, no need to specify:
• Temporary residence if not owned or leased beyond 90 days
• Premises in Canada to be occupied as principle residence from the date
you acquire ownership, but not beyond the earliest of 30 consecutive
days, policy expiration, or termination.
• Cemetery plots
• Vacant land in Canada
• Land you are building a 1-3 family residence to be occupied by you
Premises Insured
All premises the named insured/spouse maintains a residence, including seasonal or other residences, provided such premises are specifically described on the Coverage Summary page.
Personal Liability
Personal liability insures the legal liability of insureds as private citizens anywhere in the world
- Personal actions
- Arising out of the ownership, use, or occupancy of property
- Conditions of Insured’s Premises are a major source of liability claims
Exclusions of Personal Liability
Liability assumed by contract, unless
• Would have been liable in absence of contract
• When liability assumed is related to the premises
Damage to property owned by insured
Damage to property in insured’s care, custody or control, unless caused by fire, explosion, water or smoke`
Defense, Settlement & Supplementary Payments
Personal Liability
Expenses incurred in defense
Court costs for personal liability
Post judgment interest on insured amount
Premiums for appeal bonds or bonds to release property as security
Emergency medical expense followed by an insured occurrence for others
Reasonable expenses the insured incurs at insurer’s request
Obligations after an Accident
• Promptly give notice (in writing if requested)
• Co-operate
• Unauthorized settlements
Action
Coverage F —Voluntary Medical Expenses
Covers medical expenses unintentionally caused by insured, or if third party is accidentally injured on the premises: • No requirement for insured to be legally liable: voluntary • Payment: Limited amounts Limited to one year from date of accident
Coverage G —Voluntary Payment of Damage to Property
For unintentional direct damage caused by insureds to property of others even though they are not legally liable, including: • Damage intentionally caused by an insured 12 years of age and under • Minimal amounts of coverage
