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M1: Insurance terms and related concepts > Liability and Law > Flashcards

Liability and Law Flashcards

1
Q

Three types of laws used in civil court:

A
  • Statutory
  • Common
  • Tort
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2
Q

Statutory law definition

A

Based on written laws (federal, city and state legislature) and governs the authority of common law.

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3
Q

Common law definition

A

Based on court decisions and custom when statutory law does not provide an answer.

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4
Q

Tort law definition

A

The body of law that addresses and provides remedies for any civil wrongdoing performed on another party.

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5
Q

Duties of insurer and insured when 3rd party files lawsuit against insured:

A

Insured:

  • Alert insurer.
  • Forward all information regarding the matter to the insurer.
  • Cooperate with insurer and adjuster in all matters related to the court case.

Insurer’s obligations:

  • Defend the policyholder.
  • Pay any legal expenses that are incurred at its own request.
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6
Q

Statutory and Common law are used in what types of court?

A

Criminal and civil

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7
Q

Tort definition

A

Any civil wrongdoing, whether intentional or unintentional.

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8
Q

Criminal case

A
  • State charges individual.

- 100% of jury must agree the charge has been proven.

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9
Q

Civil case

A
  • One individual charges another.

- 51% of the evidence must favor the plaintiff’s casse.

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10
Q

Civil case

A
  • One individual charges another.

- 51% of the evidence must favor the plaintiff’s case.

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11
Q

Applicable jurisiction

A

Case is held where the involved parties live and do business- tort law relies on geographic location to determine which jurisdiction is applicable.

  • Jurisdiction: The authority of a court or judge to hear a case and to make a judgement.
  • Judicial District: The designation of a geographic area over which a particular court has jurisdiction.
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12
Q

Plaintiff

A

The person suffered injury or damage; also known as the claimant.

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13
Q

Tortfeasor

A

The person accused of committing a tort, otherwise known as the defendant.

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14
Q

Joint Tortfeasor

A

A group of two or more persons accused of committing a tort.

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15
Q

Intentional Tort

A

A premeditated act that causes injury to a third party.

-Ex.: OJ Simpson was sued in a civil court for the intentional torts of battery wrongful deaths of Nicole Brown and Ronald Goldman.

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16
Q

Negligent Tort

A

A negligent act that causes unintentional injury to a third party.

-Ex.: 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.

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17
Q

Statutory law

A

Based on written, legislated laws

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18
Q

Common law

A

Based on court cases and customs

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19
Q

Tort law

A

Body of law that applies to civil court cases and addresses and civil wrongdoing

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20
Q

Intentional Tort

A

Planned wrongful act

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21
Q

Negligent Tort

A

Unintentional wrongful act

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22
Q

Tortfeasor

A

The defendant in the court case.

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23
Q

Complaint

A

When a claimant files a lawsuit against a policyholder for damages the policyholder caused.

24
Q

Answer

A

The tortfeasor, or defendant’s response to the complaint can be one of the following:

  1. ) I accept the complaint and will pay for damages.
  2. ) I deny the complaint.
  3. ) I accept the complaint with a right to insert evidence into the case.
25
Q

Default Judgment

A

If the defendant fails to answer the plaintiff’s complaint, and does not appear in court, the result will be a default judgement in favor or the plaintiff.

26
Q

Reservation of Rights

A

-When the circumstances of lawsuit or a claim may not be covered under the policy, the insurer will issue a Reservation of Rights.

  • 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 (letter must):
    1. ) Include the insurer’s name, the policy number, and the event or loss.
    2. ) Clearly and concisely explain the situation, especially that the policyholder may not receive compensation or may have to defend himself in court.
    3. ) Inform the policyholder about potential consequences (Ex.: he might have to reimburse the insurer for expenses it has already paid.)
27
Q

Non-waiver agreement

A
  • Also used when the insurer thinks coverage may not apply to a claim.
  • Allows insurer to keep its right to deny coverage.
  • Must be signed by the policyholder (but the insurer may NOT force a policyholder to sign).
28
Q

Complaint

A

Filed by a claimant against a policyholder.

29
Q

Answer

A

Policyholder’s response to complaint.

30
Q

Default Judgement

A

Issued if policyholder fails to answer complaint.

31
Q

Duties of the insured

A

Alert insurer if taken to court; send insurer all information pertaining to the case.

32
Q

Obligations of the insurer

A

Defend the insured in a court case.

33
Q

Reservation of Rights or a Non-Waiver Agreement

A

Issued when the case may not fall under the terms of the insurance policy.

34
Q

What are damages?

A

Monetary compensation for financial loss or injury awarded to a plaintiff by civil court.

  • Categories of harm:
    • Physical
    • Financial
    • Physical and financial
    • Emotional or reputational
  • Two main types of damages:
    • Compensatory
    • Punitive
35
Q

Compensatory Damages

A

Money awarded for tangible and intangible economic loss.

  • Two types:
    • Special: Compensatory damages awarded for tangible losses with a quantifiable value.
    • Proven by providing medical bills, repair bills, etc.
    • Ex.: Medical bill for gunshot wound: $5,000; Repair bill for a vandalized home: $3,000.
    • General: 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.
36
Q

Diminution of Value

A

Total amount of all damages resulting from an occurrence.

-Legal term used in calculating compensatory damages.

37
Q

Punitive Damages

A
  • Money awarded to punish egregious misconduct
  • For intentional acts, such as slander, fraud, violence, oppression, or recklessness.
  • Not typically covered in liability insurance.
38
Q

Compensatory damages

A

Awards money for tangible and intangible damages.

39
Q

Special damages

A

Money awarded for exact value of tangible damages.

40
Q

General damages

A

money awarded for intangible, emotional damages decided by court.

41
Q

Punitive damages

A

Awards money for malicious, willful, misconduct on the part of the tortfeasor.

42
Q

The Statute of Limitations

A

A law limiting the amount of time an injured party has to file a complaint after an occurrence.

43
Q

The Wrongful Death Act

A

Law that defines the rights of individuals who are associated with someone who has killed because of a negligent act.

Plaintiffs may sure for damages such as:

  • loss of companionship
  • loss of income
  • pain and suffering
44
Q

Workers’ Compensation

A

Restrict an employee’s right to sue his or her employer for injuries that occurred on the job.

45
Q

Automobile No-Fault Laws

A

Restrict an individual’s right to sue the driver of a motorized vehicle.

46
Q

Breach of Product Warranty

A

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.

47
Q

Waiver of Sovereign Immunity

A

Law that allows individuals to sue governmental entities for damages in certain cases.

48
Q

Discovery Rule

A

Statutes of limitations run from when an injury is, or should have been, discovered.

49
Q

Sovereign immunity

A

Law that restricts people from suing governmental entities.

50
Q

Product warranty

A

A manufacturer’s guarantee ensuring the quality of its products.

51
Q

Statute of limitations

A

plaintiff has a limited time to file a complaint after an occurrence.

52
Q

Wrongful death act

A

protects parties associated with a death caused by negligence

53
Q

Waiver of Sovereign immunity

A

individuals may sue government entities in certain cases.

54
Q

Workers’ Compensation laws

A

keep employees from suing their employers for injuries.

55
Q

Auto no-fault laws:

A

Keep people from suing drivers for damages.

56
Q

Breach of Product Warranty

A

Manufacturers are strictly liable for producing faulty or dangerous products.

M1: Insurance terms and related concepts (12 decks)

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