Study 11: Liability Claims - Summary Flashcards
Coverages provided by a personal liability policy
- Legal liability
- Voluntary medical payments
- Voluntary payment for damage to property
- Voluntary compensation for residence employees
A personal liability policy wording that specifies premises covered will typically include the following
- All premises where the named insured or his or her spouse maintains a residence
- Other residential premises specified in the policy (on the coverage summary page) but not business property or farms
- Individual or family cemetery plots or burial vaults
- Vacant land in Canada that the insured owns or rents, excluding farmland
- Land in Canada on which a one-, two-, or three-family residence is being built that will be occupied by the insured
- Premises the insured is using or where the insured is temporarily residing if such premises are not owned
Coverage E - Insureds are covered for claims made against them arising from the following
- Their personal liability
- Premises liability
- Tenants legal liability
- Employers liability
There is no personal liability coverage for claims made against the insured arising from the following
- the personal actions of any named insured who does not live on the described premises;
- the ownership, use, or operation of any motorized vehicle, trailer, or watercraft, except those for which coverage is shown in this form;
- damage to property the insured owns, uses, occupies, or leases;
- damage to property in the insured’s care, custody, or control;
- damage to personal property or fixtures as a result of work done on them by the insured or anyone on his or her behalf; or
- bodily injury to the insured or to any person residing in his or her household other than a residence employee.
Defence, Settlement, Supplementary Payments (in addition to the limit of insurance)
- All expenses the insurer incurs
- All costs charged against the insured in any suit insured under Coverage E
- Any interest accruing after judgment on that part of the judgment within the amount of insurance of Coverage E
- Premiums for appeal bonds required in any insured lawsuit involving the insured and bonds to release any property that is being held as security, up to the amount of insurance, but the insurer is not obligated to apply for or provide these bonds (the insured must do that)
- Expenses that the insured incurs for emergency medical or surgical treatment to others following an insured accident or occurrence
- Reasonable expenses, including loss of earnings, up to a specified dollar amount per day, which the insured incurs at the request of the insurer
Coverage F - Voluntary medical payments
The policy will pay reasonable medical expenses incurred within one year of the date of the accident, if the insured unintentionally injures another person or if the person is accidentally injured on the insured premises
Coverage G - Voluntary Payment for Damage to Property
This section of the policy will pay for unintentional direct damage caused by the insured to property of others even though there is no legal liability to do so. The coverage may also be used to reimburse others for direct property damage caused intentionally by anyone included as an insured under Section II of the policy, 12 years of age or under.
In the event of a personal liability claim under a homeowners policy, the insured must comply with the following provisions
- Notice of accident or occurrence (prompt notice, in writing if required)
- Cooperation (must help obtain witness, information, evidence, and forward documents)
- Most not make any unauthorized settlement
- Will not bring suit against the insurer until all terms of the policy have been met, or until 60 days after the proof of loss form has been submitted
- If there is other insurance that applies to a loss, this policy will be considered excess
Liability claims arise under civil law, which imposes liability under three categories
- Negligence—failing to use the degree of care expected from a reasonable and prudent person
- Nuisance— causing a person to lose the full enjoyment of that person’s land by substantial and unreasonable interference
- Breach of contract—failing to fulfill obligations agreed to in a contract
Actionable tort
An actionable tort is a wrongful act or an infringement of a right for which a person who suffers harm could seek legal remedy under the civil court system
Three elements necessary to constitute an actionable tort
- A legal duty of care must be owed
- There must be a breach of that duty
- The breach must have caused the damage
Duty owed to trespassers
Trespassers must be treated with common humanity. The following should be considered in deciding whether this duty has been breached:
- Gravity and likelihood of probable injury
- Character of the intrusion
- Nature of the premises
- Knowledge the occupier had of the trespasser’s presence
- Cost to the occupier of preventing harm
Duty owed to other entrants (not trespassers)
- Licensee - on the premises with the occupier’s consent for their own purposes, must be protected from concealed traps
- Invitee - enters premises where the occupier has some financial interest in their being there. Owed the highest duty of care
- Contractual entrant - enters premises under contract with the occupier, such as a hotel guest
Proving liability
- The adjuster must know whose responsibility it is to provide proof of the cause and proof of the damage
- The burden of proof usually rests with the person who has sustained the damage and wants to recover, but the onus can be shifted by statute (ex. a bailee)
Strict liability
The rule of strict liability, where proof of negligence is not required, applies to owners and occupiers who bring something onto their land that potentially could cause damage should it escape to adjoining property (Rylands v. Fletcher)
