Unit 5 Basic Concepts of Liab

Question 1

3 Types of Liability

5-4

Answer 1

• Direct
• Assumed (Vicarious)
• Absolute (Strict)

Question 2

Direct Liability

5-4

Answer 2

Occurs when a person or entity is held responsible for its own actions or failure to act b/c it failed to take ordinary and reasonable care. A type of liab that arises from a professional’s own acts and omissions in the course of providing professional services

Question 3

Assumed (Vicarious) Liability

5-4

Answer 3

Occurs when a person or entity is responsible for harm caused by someone acting on its behalf. A type of liability that arises from a contractual agreement as opposed to liab that arises from common or statutory law

Question 4

Absolute (Strict) Liability

5-4

Answer 4

Occurs when the person or entity is held liable whether or not that person or entity is at fault. Liab is automatic and the injured party does not have to prove that negligence existed. A type of liab that is imposed when a person or entity is held accountable for a loss w/o regard to fault.

Question 5

3 Major Sources of Legal Liability

5-5

Answer 5

• Criminal
• Contract
• Tort

Question 6

Criminal Law

5-5

Answer 6

the type of law that protects the rights of the public and that addresses wrongs specified by the governmnt laws and statutes

Question 7

Contract Law

5-5

Answer 7

the type of law that protects the rights of those who have entered into oral or written legal agreements and that addresses contractual breaches, which are considered civil wrongs

Question 8

Tort Law

5-5

Answer 8

a type of law that protects the legal rights of an individual when someone causes harm to a person or property

A civil wrong that can result in a civil lawsuit and that provides monetary remedies for harm done.

Question 9

Define Liability

5-7

Answer 9

Liability is the legal obligation and responsibility for injury or damage suffered by another person

Question 10

Indicate the primary source of most lawsuits that involve general liability insurance
(5-7)

Answer 10

General liab ins usually involves liab arising out of civil wrongs in the tort system

Question 11

Identify the goal of the tort system

5-7

Answer 11

The tort system seeks to compensate the plaintiff and foster the defendant’s due diligence

Question 12

Negligence

5-7

Answer 12

a type of tort that occurs when a professional fails, to meet the standard of care required of someone in that profession under similar circumstances and that causes the plaintiff to suffer injury or damages proximately caused by the professional’s breach of duty

Must be proven B4 a defendant can be found liab, and a plaintiff can be compensated for the harm suffered

Question 13

Fault Falls into 1 of 4 Categories

5-8

Answer 13

• Negligence
• Gross Negligence
• Recklessness
• Intentional Fault

Question 14

Gross Negligence

5-8

Answer 14

a degree of fault that involves carelessness and reckless disregard for the safety or lives of others and that is a conscious and voluntary disregard of the need to use reasonable care

Question 15

Recklessness

5-8

Answer 15

a degree of fault that involves the conscious and willful disregard for others in an action that increases the danger of an act occurring

Question 16

Intentional Fault

5-8

Answer 16

A degree of fault that involves the malicious infliction of harm resulting in injury

Question 17

4 Criteria of Tests that a Plaintiff Must Prove for Negligence
(5-8)

Answer 17

• Duty
• Breach of Duty
• Proximate Cause
• Injury/ Damage

Question 18

Duty

5-8

Answer 18

a legal obligation to act w/ a certain standard of care

Question 19

Breach of Duty

5-9

Answer 19

a violation of a legal duty

Question 20

Proximate Cause

5-9

Answer 20

the breach of duty must be the proximate cause of the injury or damage, either directly or indirectly, through a chain of events caused by the breach of duty. Was the harm directly caused by the person’s breach of duty

Question 21

Injury/ Damage

5-9

Answer 21

The physical harm of financial loss that a party suffers due to the insured’s negligence

Question 22

3 Classifications for Damages are

5-9

Answer 22

• Compensatory
• General
• Punitive

Question 23

Compensatory Damages

5-9

Answer 23

the costs for losses that are awarded to claimants and that include both special damages (specific out-of-pocket costs - medical expenses, lost wages, etc.) and general damages (costs for pain and suffering)

Question 24

General Damages

5-10

Answer 24

are awards when negligence can be proven but an actual quantifiable loss cannot be made as a result of the negligence. These damages include things like loss of consortium and pain and suffering

Question 25

Punitive Damages

5-10

Answer 25

a type of damages (exemplary) that are awarded in addition to any compensatory damages to penalize a defendant for grossly negligent, malicious, reckless, or intentional conduct

Question 26

What is the difference between negligence and recklessness?

5-11

Answer 26

Negligence is a failure to exercise a standard of care in a particular situation, causing injury or damage to another. It is usually unintentional and caused by inattention. Recklessness is a conscious and deliberate act that increases the danger of an act and places other in danger of harm

Question 27

What is the relationship between liability and negligence?

5-11

Answer 27

Under the tort law, negligence must be proven for an individual to be held liable for harm done to others

Question 28

What must be proven for negligence to exist in a liability lawsuit?
(5-11)

Answer 28

a plaintiff must prove that the defendant had a legal duty to meet a specified standard of care, breached that duty, and caused the plaintiff’s injury or damage. Duty, breach of that duty, proximate cause and actual injury or damage must all exist for negligence to be established.