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What does legal liability stem from?
the law of torts,contracts or statutes.
A private wrong is called a_______.
violation of a person's rights by another would fall under the_______________.
law of torts
true/false torts can lead to civil action
torts are commonly classified as either:(2)
intentional or unintentional
assault, libel, slander
negligence or carelessness
What is the most common cause of legal liability?
Legal liability is established when:(4)
- There was negligence
- there was actual damage or loss
- the negligence was the cause of loss
- the person injured was free from fault
What constitutes negligence?
- failure of a person to exercise the proper degree of care
- burden of proof is on the injured party
In a negligence case, who has the burden of proof
the injured party
- legal liability is established because accidents happen
- imposed whether anyone was at fault(especially ultra hazardous activities)
- can occur due to statute
In_______ legal liability is established because accidents happen
_______is imposed whether anyone was at fault (especially ultra hazardous activities)
____ can occur due to a statute
How are compensatory damages paid?
they are paid to compensate injured party for the harm caused to them.
punish defendants whose conduct is questionable or those found guilty of gross negligence.
Liability types(7)(very important to know all 7)
- joint and several
- operations conducted away from premises
- uncompleted work
- aka operations in progress
common physical hazards that may result in operations liability
slip and fall type claims caused by (uneven stairs, poor lighting, poor housekeeping,unsafe areas)
special operations liability
- more unique to a certain type of business class
- (chemicals,dust, explosives, heavy material)
uneven stairs, poor lighting, poor housekeeping, and unsafe areas are ___(1)___hazards that may cause ____(2)_______.
- 1. physical
- 2. operations liability
chemicals, dust, explosives, and heavy material are a ____(1)______form of ____(2)______liability.
T/F claims usually include a condition allowing the insurer to settle out of court without the policyholders consent.
________usually include a condition allowing the insurer to settle out of court without the policyholders consent.
when underwriting__________ is given to whether defense costs are to be included.
other factors in legal liability for claims include:
accounting scandals, market trends, job markets and local conditions
what type of doctors are considered to be at high risk for medical malpractice?
specialists- anesthesiologists, neurosurgeons, OB-GYN's
considerations in underwriting professional liability(4)
years in practice, education, professional reputation, and claims history
_______ usually represents a higher risk in other areas as well(not just doctors)
specialty(aka lawyers, accountants and insurance agents)
Individuals and families are usually covered under which policies?
homeowners, tenants, and umbrella policies
What does underwriting personal liability arise from
- premises liability, operating a vehicle, living life etc.
- non business activities
items that attract children onto premises
Things that factor into underwriting premises liability)(4)
- attractive nuisances
- uneven sidewalks
- poorly lighted properties
why don't insurers often spend much money on inspection of properties for premises liability
premium is low(not worth the time)
Instead of inspecting properties for premises liability, how do insurers get info on property?
ask questions or get pictures
Things insurers look for when underwriting premises liability(6)
- vicious dogs
- swimming pools
- hot tub
- property being renovated
- any part of the premises rented to others
personal activities that may cause liability(4)
- children causing damages
- unlicensed recreational vehicles
- completed operations(food)
- sports liability
what is clue?
- comprehensive loss underwriting exchange
- that gives insurers a 5 yr history of property claims(kind of like car fax)
percentage of insurers that participate in clue?
main things taken into account for auto insurance underwriting(2)
- age of operator
- age and type of vehicle
How does the age of a driver come into play when underwriting auto?
- under 25 high risk
- over 55 higher risk
reasons why insurers look at age and type of vehicle when underwriting auto?(3)
- older cars might have mechanical issues
- auto type- sports car vs station wagon vs sedan
- cost of parts and repairs
things taken into consideration for auto insurance underwriting(6)
- auto use
- driving record
- gender and marital status
- age of operator
- age and type of vehicle
Types of auto usage considered by insurers
- Pleasure use
- drive to work(3-10 miles)
- drive to work(over 10 miles)
- business use
what do insurers look at when looking at driving records of insureds
- moving violations
- driving habits indicate lack of skill
Location factors that affect auto insurance premiums.
- rural vs urban
- pop density
- winter or rainy weather
Gender and marital status factors that affect auto premiums
- Female drivers safer at younger ages
- married males under 30 see less accidents
What is the difference between underwriting commercial and personal auto?
- same, except there are some additional considerations including:
- vehicle weight and vehicle use
why does vehicle weight matter?
damage is greater with heavier vehicles
types of commercial vehicle use
vehicle use: (service)
driven to job site and sit until the end of the day
delivery to households and pickups
vehicle use: (commercial)
anything that does not fall into service or retail.
Examples of on premises hazards(2)
physical layout of a facility in that particular line of business
good history of plant and machine maintenance is a good sign of safety.
unsafe acts cause______ of accidents
unsafe acts are caused by:
- employees not following protocol or procedure
- they are difficult to identify
- and behavior influence are needed to manage them
Unsafe acts are______ to identify
Which is easier to identify unsafe conditions or unsafe acts?
examples of unsafe conditions
office vs factory
off premises hazards(5)
- work travel
- travel duration
- mode of transportation
- hazards at remote job sites
- traveling with large amounts of employees(sometimes in a corporate jet)
management attitude(in wc underwriting)
- safety program
- good leadership/mgmt
- ee morale
- company support
- willingness to investigate and fight fraud
Disease that workers are exposed to or face that they would not normally in the general public
examples of occupational disease
exposure to asbestos, toxic dust, radiations etc.
What is the problem with underwriting wc for occupational disease?
it is difficult to identify and estimate cost(as opposed to an accident
What does OSHA stand for?
occupational health and safety act
what does osha require er's to do?
- have government safety inspections
- ers must keep work premises safe for ees
- also must follow set safety regulations
- employers are unable to obtain them privately
- state plans
- joined uw associations
- assigned risk pools
What do umbrella policies cover?
large, low frequency losses
______ does not usually provide primary insurance
Provides excess above liability limits on an underlying policy
What happens to an umbrella policy if underlying limits are not maintained
the umbrella will still only respond as if those limits are in place
who commonly purchases an umbrella policy?
high net worth individuals and businesses
- Increases the limits of liability on an underlying policy
- does not broaden coverage(unlike umbrella)
- severity not frequency is the issue
In this type of policy, often the individual case is not underwritten, but broad considerations like catastrophe exposures are considered
in excess policies________ is the main issue
_______increases the limits of liability on an underlying policy.