Lecture 3 Flashcards
Exposure of physical assets
- ownership- real (buildings) or personal (able to more -cars)
- use/possession - may lead to legal liability or loss
- valuation - new value of a house with work done
perils of physical assets
building falls apart-hurricane, tornado
hazards
an action, condition, or circumstance that makes a peril more likely to occur or a loss more likely to be suffered as a result of the peril
legal liability
the legal responsibility to remedy some harm experienced by another-typically financial
exposure of a legal liability
financial assets used to fulfill responsibility to pay for someone else’s harm (consider reputational losses as part of consequential/net income exposure later)
valuation (exposure of legal liability)
judgment/settlement - amount defendant is required to pay
special damages
economic damages (injury, medical bills, moped damage)
general damages
pain and suffering - hard to evaluate how much someone suffers
punitive damages
to punish and SEND A SIGNAL
costs of defense (exposure of legal liability)
reputational damage
consequential exposure
peril of a legal liability
the filing of the legal claim (not the occurrence of the harm)
hazard of legal liability
wrongful conduct, poor record keeping, operating in locations where laws are more favorable toward plaintiffs
examples of activities that could lead to legal liability
using a vehicle, manufacturing or selling products, providing services, acting as an employer, owning a vehicle
legal liability
financial responsibility to pay for someone else’s harm
categories of wrongful conduct
criminal wrongs and civil wrongs
criminal wrongs
wrong against society-punishment
ex: speeding-it’s a crime but i’m not hurting someone
civil wrongs
wrong against an individual (corp., municipality)
breaches of contract (civil wrong)
most common-legally enforceable agreement one part fails to do what they’re supposed to -the other party can sue (tenant/landlord agreement)
tortious conduct (civil wrong) intentional
literally any civil wrong that is not a breach of contract
tortious conduct (civil wrong) unintentional
basis of legal liability in US (our focus)
common law
rules determined by court decisions
judiciary is the decider-case oriented
easier to change (more flexibility)
neg-you don’t know about the future changes
civil law
rules determined by legislative bodies
mainly from legislation-written
not easy to change
other types of law
communist/socialist
tribal
religiously based
