Absolute Liability
Most often dangerous animal ownership, abnormally dangerous activities, and employers liability for injuries sustained by their employees.
(Dangerous animals: lions, bears, and certain dogs like pitbulls & rottweillers)
Applies to the storage of explosive
Strict Liability Applies to Products
If a claimant can prove that a product caused the injury, the manufacturer will be held liable whether or not the product was defective.
Liability may be asserted even in the absence of negligence. (For ex: the manufacturer of a dangerous product is alway
No-Fault Liability
The injured party collects insurance benefits from his or her own insurance as if it were first-party coverage, thus eliminating the process of determining negligence or legal liability. No-fault laws vary by state and typically apply to auto insurance.
E
Pure No-fault
injured person is unable to sue negligent party
Modified No-fault
Injured person is only able to sue after a certain amount of damages has been reached
Named Insured
Person specifically named in the policy under Declarations
First named insured
The one listed first of the named insureds
Additional Insureds
Persons covered by the policy in addition to other insureds
Other insurance
Primary-
Excess-
Pro Rata Liability-
Provision specifying the process to be followed when more than one policy covers the same loss
-If primary, make payment before all other policies in place make payment for a loss
&& also pays 1st w/ respect to other policies
-Makes payment only after all
Limits of Liability
Specifies the most they'll pay in the event of a loss.
Certain limits of liability apply to any one loss; other limits apply to the total of all losses that occur within the policy period. In addition, the manner in which limits of liability are designate
Per Occurrence limit
The most the policy will pay for all losses arising out of any one occurrence, regardless of other policy limits. Example: The limit of liability for personal liability on a homeowners policy is a per occurrence limit.
Per Person Limit
The most the policy will pay for loss to any one person injured in any one loss, regardless of other policy limits. For example, the limit of liability for medical payments coverage on an auto policy is a per person limit.
Aggregate limits
The total amount of insurance a policy will pay, for all coverages, within a specific period- such as a policy year. The most the policy will pay for all losses submitted during the policy period, regardless of other policy limits.
Each loss payment made
Split Limit
Split limits are generally used in auto insurance and provide separate limits of coverage for different types of coverage and claims. For example, the limits of liability on an auto policy for bodily injury might be represented as 100/300/100 ($100,000 is
Combined Single Limit
The most the policy will pay for all losses of all types resulting from any one occurrence, regardless of other limits. For example, the per occurrence limits on homeowners and general liability policies provide coverage for the sum of all bodily injury l
Assignment
Insured cannot transfer policy ownership without the written consent of insurer
Subrogation
After an insurer pays a loss, it is granted the insured's rights to seek recovery from the party responsible for the loss
Liberalization
When coverage under a particular form of insurance issued by an insurer is broadened without an additional premium charge, it automatically applies to all policies currently in effect
Lightning Facts
1. A tort is a wrongful act, other than a breach of contract or a crime that violates a duty or the rights of another and for which compensation may be sought from the responsible party. 3.1
2. An intentional tort is a deliberate act that harms another an
B has 2 policies on a property. Policy A is for $20,000; Policy B is for $40,000. If Policy A has a pro rata provision, how much will it pay for a covered loss of $15,000?
$5,000. Policy A's coverage is 1/3 of the sum of all coverages, so if loss is shared on a pro rata basis, policy A will pay 1/3 of the loss, or $5,000.
True about liability policies EXCEPT:
They will cover damage to the insured's own property
(a liability policy does not cover damage to the insured's property, it covers damage to property of a 3rd party)
Intervening cause
A chain of events that may be broken by this, thus freeing the defendant from liability
2nd neg. act that interferes with the chain of events leading to a loss
P's liability policy has the following limits: $50,000 per person, $250,000 per occurrence, and $400,000 aggregate. During the policy period, the policy paid out $250,000 in liability claims. If P suffers another loss of $250,000 during the same policy pe
$150,000 b/c policy has an Agg. Limit of $400,000 during the policy period, and has already paid out $250k, the most it'll pay during the remainder of the period is $150,000, regardless of the amount of loss.
H's liability policy has the following limits: $25,000 per person, $100,000 per occurrence, and $2,000,000 aggregate. This year, five separate claimants file in the amount $25,000 for injuries suffered in a single accident. How much will the policy pay?
$100,000 b/c all 5 injuries arose from a single accident, the per-occurrence limit will cap the compensation at $100,000.
Medical payments
are made without regard to fault/negligence
Medical expenses & loss of earnings awarded to an injured party are considered
Special damages
Negligence
Unintentional, civil tort, that rules OUT breach of contract & both robbery/assult
Liability Coverage is designed to
Protect the insured from bodily injury and property damage they are legally obligated to pay
Policy A provides liability coverage to a Fred's Grocery up to $500,000. Policy B provides coverage for the same risks up to $1.5 million. Both policies pay on a pro rata basis. If Fred's Grocery is determined to have a legal liability of $400,000 to a cl
$100,000.
Pro rata liability requires that each policy pays no more than its share of the loss. The total insured amount carried by Fred's Grocery is $2 million ($500,000 + $1.5 million). Policy A's share of that amount is 25% ($500,000/$2 million). There
Contribution by Equal Shares
Describes the equal sharing of a loss by two or more insurers until the loss is paid, or until each insurer has exhausted its limits of insurance, whichever comes first
Contributory Negligence
Prevents all recovery for injuries if the claimant was also considered partially negligent
Prevents claimant from recovering damages if claimant was anyway also at fault
Driver D slid into another car causing an accident in which three people in the other car were injured. Two injured parties claimed $15,000 in medical expenses and the third person claimed $25,000. How much will D's insurance company pay if her policy has
$50,000
The policy pays up to $25,000 for each person injured, but no more than $50,000 per occurrence, regardless of the number of persons injured. Therefore, the limit for this accident is $50,000
All of the following statements regarding liability losses are correct, except:
Bodily injury includes personal injury, physical injury, sickness and disease
Common law defenses against negligence include
Contributory neg, assumption of risk, and intervening cause. NOT statute of limitations