Intro To Liability Insurance Flashcards
What is a term for an unintentional tort?
Negligence
What is a tort?
A tort is a civil wrong that violates the rights of another.
What is negligence?
The lack of reasonable care required to protect others from the unreasonable chance of harm.
What four factors must be involved to establish negligence?
- Legal duty owed
- Breach of legal duty owed
- Proximate cause
- Damages
What is the legal duty owed?
As a general rule, each person owed a duty to another to protect the others rights and property. Each person is expected to behave like a reasonable or prudent person, following those ordinary considerations that guide human affairs. Sometimes known as the REASONABLE PERSON RULE.
What is degree/standard of care?
The duty owed by one person to another.
What is an invitee?
A person invited onto the premises involving potential benefit to the property owner
What is a licensee?
A person on the property with the owners consent but for the sole benefit of the visitor.
What is a trespasser?
One who is on the premises without permission, either expressed or implied.
What is proximate cause?
An action that, in a natural and continuous sequence, produced the loss. This sequence is unbroken by any other factors or events, and the loss would not have occurred without the proximate cause.
What is an intervening cause?
When an independent action breaks the chain of causation and sets in motion a new chain of events.
What must another party suffer to prove negligence?
Damages.
What is contributory negligence?
If a person contributed to their negligence in any way.
What is comparative negligence?
Allow a finding of liability to be made even when both parties have contributed to the loss, with an award based on the extent of each party’s negligence.
What is assumption of risk?
When a person knowingly exposes himself to danger of injury. When a person assumes this risk, the person may be prevented from recovering from a negligent party.
What is a statute of limitations?
Laws that provide that certain types of lawsuits must be filed within a specific time of the occurrence to be valid under the law.
What is absolute liability?
Imposed by law on those participating in certain activities that are considered especially hazardous. Individuals involved in such operations may be held liable for the damages of another, even though the individual was not negligent. Most frequently applied to activities involving dangerous materials, hazardous operations, or dangerous animals
What is strict liability?
Usually used in reference to product liability is another term for absolute liability.
What is vicarious/imputed liability?
When a person may be held responsible for the negligent acts of another person
What is a third party loss?
Liability loss, the person who suffered injury or damage at the fault of the insured.
What is a first party loss?
Property loss
What are damages when referring to financial consequence of liability?
Monetary compensation
What are compensatory damages?
Reimburse the party only for losses that were actually sustained
What are special damages?
Include all direct and specific expenses involved in a particular loss, such as medical expenses, lost wages, funeral expenses, and the cost to repair or replace damaged property.
What are general damages?
Compensate for things such as pain and suffering, and disfigurement. General damages also include mental anguish and loss of companionship.
What are punitive/exemplary damages?
Intended to punish the defendant and make an example of him to discourage others from behaving the same way.
What does bodily injury mean?
Injury, sickness, disease, death arising out of injury
What is property damage?
Damage to or destruction of property, including loss of use of the property.
What is personal injury?
Slander, libel, false arrest, invasion of privacy.
What is prejudgment interest?
A court will sometimes award a third party interest on an award for damages to compensation for the interest the third party might have earned if the party had received compensation at the time of injury or damage rather than at the time of judgement
What are supplementary payments?
- Defense costs
- Expenses incurred in the investigation of a claim
- Premiums for certain types of bonds, such as bail bonds, appeal bonds, and release of attachment bonds
- First aid to others at the time of an accident
- Reasonable expenses incurred by the insured at the company’s request in the investigation of a claim
- Loss of earnings
- Prejudgment interest
- Postjudgement interest
What is stated in the policy limits?
The maximum amount the company will pay on behalf of the insured
What are split limits?
The policy may stipulate separate limits for bodily injury and property damages
What are single/combined limits?
The policy may have one limit that applies to both bodily injury and property damage
What does per occurrence mean?
Either a loss that occurs at a specific time and place or a loss that occurs over time
What is per accident?
An older more restrictive term than per occurrence that limits covered losses to those that occur at a specific time or place
What is per person?
States how much will be paid for injury to any one person in an occurrence or accident
What is an aggregate limit?
A limit that applies to all losses occurring within any one policy period
General liability coverage exclusions?
- Damage to property owned by the insured
- Damage to property in the insureds care custody or control
- Bodily injury to an insured
- Losses covered under workers comp laws
- Losses covered under nuclear energy liability policies
- Injuries or damages cause intentionally by the insured
What is contribution by equal shares?
All insurers pay equal amounts up to the limit of the policy having the smallest limit. Then that company, having paid its policy limit, stops paying, and the other company’s share the remainder of the loss.
