[h] CPCU 552 – Module 1
[q] Legal liability
[a] The legally enforceable obligation of a person or an organization to pay damages to another.
[q] Civil law
[a] A classification of law that protects rights and provides remedies for breaches of duties.
[q] Criminal law
[a] A classification of law that imposes penalties for wrongs against society.
[a] A wrongful act other than a breach of contract or crime.
[q] Broad categories of torts
[a] Three broad categories:
Strict liability torts.
[a] A civil wrong that is unintentional.
[q] Elements of negligence
The defendant owed a legal duty to the plaintiff.
The defendant breached the duty.
The negligent act was the proximate cause.
The plaintiff suffered damage or injury.
[q] Intentional tort
[a] A tort committed by a person who foresees the act will cause harm.
[q] Strict liability
[a] Liability imposed even though defendant acted neither negligently nor with intent to cause harm. Also known as absolute liability.
[q] Breach of contract
[a] The failure to fulfill a contractual promise.
[q] Hold-harmless agreement
[a] A contractual provision that obligates one party to assume the legal liability of another party.
[a] A written law passed by a legislative body, at either the federal or state level.
[q] Categories of commercial liability exposures
Premises and operations liability.
Products and completed operations liability.
Workers compensation and employers liability.
Professional liability, management liability.
Marine liability, aircraft liability.
[q] Premises and operations liability
[a] Liability that arises from bodily injury or property damage caused by:
An accident occurring on an organization’s owned, leased, or rented premises.
An accident arising from an organization’s ongoing operations away from the premises.
Certain mobile equipment.
[q] Products liability
[a] Liability that arises out of the manufacture, distribution, or sale of an unsafe, dangerous, or defective product.
[q] Elements needed to provide strict liability
[a] Plaintiff must prove:
The product was defective when it left the manufacturer’s or supplier’s control.
The defective condition made the product unreasonably dangerous.
The product was proximate cause of injury.
[q] Completed operations liability
[a] Liability of an entity arising out of their completed work.
[q] Reasons for risk control programs
Liability exposures that arise from products and activities can cause serious harm.
Exposures can result in significant financial consequences.
Poor safety records and serious accidents can cause reputational damage.
[q] Loss prevention
[a] A risk control technique that reduces the frequency of a particular loss.
[q] Loss reduction
[a] A risk control technique that reduces the severity of a loss.
[q] Risk avoidance
[a] A risk control technique that involves ceasing or never undertaking an activity, thus eliminating loss potential.
[q] Key issue affecting the valuation of a liability claim
[a] Key issue is the amount of monetary compensation that will reasonably indemnify the party who incurred the loss.