Legal Concepts - section 5 Flashcards
Suplus Lines: define
most cases, insurance is placed with an admitted insurer but sometimes it can be placed with non-admitted insurers, called surplus lines.
Insurance may be unavailable in the standard market or form admitted companies if an applicant possesses such unusual risk characteristics that standard companies will not take the insurance. This type of business is called “ excess insurance” because it is beyond the capacity of standard insurers to accept
Marketplace need
such coverages are marketed through non-admitted insurers who specialize in offering insurance to the high risk market
these difficult to place risks range from importing and exporting wild animals to hazardous waste
Surplus must be on what list
approved list
Requirements of surplus lines
all states require an insurer to obtain a license or certificate of authority to carry out the business of insurance. In CA, these insurers are called admitted or authorized insurers
- agent must attempt to place business with admitted carriers before referring the client to a surplus lines broker
- must certify to surplus lines broker that they have attempted in good faith to obtain insurance and were unable to do so from the admitted carriers. must complete form of a at 3 insurers who declined risk - any ca citizen may negotiate and obtain insurance on their own property by dealing directly with a non admitted insurer
Special Surplus Lines
- insurance on property or operations fo railroads engaged in interstate commerce
- insurance on goods, ware, merchandise, personal property etc. being exported by land or water
- reinsurance of the liability of admitted insurer
- aircraft insurance
- insurance against perils of navigation, transportation on hulls, freights and disbursements and other ship owner interested, marine builders risks and other types of ocean marine risks
Tort law =
legal liability = establishes who is responsible = who is obligated to pay = harm to others
Tort
private/civil wrong. Excludes breach of contract and criminal wrong
Contract law
agreements, breach of contract, entitled to damages, attorney fees and cost
Type of torts
Intention tort, unintentional tort, absolute liability, strict liability
Intentional tort
deliberate act - assault, battery, libel, slander, false arrest, etc. Some intentional torts can be covered by insurance and are considered “personal injury”
Unintentional tort
negligence
Absolute Liability
claimant does not have to prove anything
strict liability
claimant must prove that a defect in the product caused injury or damage
4 elements of negligence
- . duty owed
- duty breached
- unbroken chain beginning with negligence
- ends in bodily injury or property damage
Proximate cause
what states the sequence of events, An uninterrupted or unbroken chain of events, In liability, it must start with negligence. In property insurance, it must start with an insured peril. Both property and liability would have to induce harm or damage
Defense/doctrines/strategies used to defeat or reduce legal liability:
- contributory negligence
- last clear chance
- assumption of risk
- intervening cause
- comparative negligence
- statutes of limitations
Contributory negligence
if claimants actions contributed to the loss, they are barred fringe recovery
Last clear chance
used to counter contributory negligence. A person had a chance to avoid a loss and did not exercise it or refused to do so. Common law defense
Assumption of risk
The claimant was aware of the risk and still placed themselves in the situation. Example would riding a roller coaster. Common law defense
Intervening cause
a broken or interrupted chain of events freeing the insured from liability, such as black ice. Common law defense
Comparative negligence
both at fault
- damages are settled proportionally to the degree of fault. A person who was 25% at fault. a person who was 25% at fault would receive only 75% of the value of their claim. The other party that was 75% at fault would only receive 25% of the value of their claim. Statutory law
Statutes of limitations
valid defense if legal action is initiated after the statutory time period for taking action has expired. Example: auto claims requires action be taken within 1 year of the accident. Statutory law. This is a state exam question