Your SlideShare is downloading. ×
Legal Concepts Of Liability Insurance   2010
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Saving this for later?

Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime - even offline.

Text the download link to your phone

Standard text messaging rates apply

Legal Concepts Of Liability Insurance 2010

1,398
views

Published on

THis course addresses liability insurance and the legal concepts associated with it. During the course, students will gain an understanding of the following concepts: Four Types of Exposures: Test …

THis course addresses liability insurance and the legal concepts associated with it. During the course, students will gain an understanding of the following concepts: Four Types of Exposures: Test for Negligence; Defense and Conditions for Negligence; Duty to Defend; Claims Settlement and Payments by Policy Structure


0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
1,398
On Slideshare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
26
Comments
0
Likes
1
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide
  • In this course we will look at the concept of legal liability. We will look at the four types of exposures, review the test for negligence, study the defense and conditions for negligence, review the policy’s duty to defend, study claims settlements, and payments by policy structure. At the end of this course, you will have earned 2 CE credit.
  • Liabilities may result from property damage, bodily injury, libel, or any other damages caused by the insured. The insurance company agrees to pay for such damages if they are awarded by a court, up to the limitations specified in the insurance contract. The insurer may also cover legal expenses incurred in defending the suit.
  • Although broadly speaking “liability” as used in the law, means legal responsibility, it is a general term whose precise meaning depends upon the context in which it appears. For insurance, legal responsibility for damages caused by your actions or activities.
    Defining liability seems simple, especially when it comes to car accidents. We can see it clearly in this context. We don’t stop our car soon enough and hit another, we are responsible for damages caused by our actions or failure to act. However, determining liability is not always so simple.
  • Strict liability is a legal doctrine that makes some persons responsible for damages their actions or products cause, regardless of any "fault" on their part. Strict liability often applies when people engage in inherently hazardous activities, such as doing "blasting" in a city, or keeping wild circus animals. If the blasting damages you -- no matter how careful the blasting company was -- it is liable for the injury. Similarly if the animals escape and injure someone, the fact that the circus used the world's strongest cages and the highest standard of care imaginable will not let it get off the hook. Strict liability also may apply in the case of certain manufactured products. In strict product liability, typically anyone who is engaged in the stream of commence of the product (from the manufacturer to the wholesaler to the retailer, or all of them) can be held responsible if the product was defective and someone was injured. There is no need to prove negligence but the injured party must prove that the product was defective. Defective products may be the result of bad manufacturing for the failure to provide adequate instructions for the use of the product. Those engaged in the stream of commerce with respect to products should reasonably foresee that some people will misuse the product and should design the product so that injury does not occur. Disclaimers and waivers of liability for products are often invalidated by courts as against public policy (courts should not condone the manufacture and distribution of defective products) and typically warranties are limited so that manufacturers and retailers are held responsible for personal injuries caused by the use of the product.
    Product Liability – The liability of a manufacturer or seller of an article for an injury caused to a person or to property by a defect in the article sold. A product liability suit is a tort action in which strict liability is imposed. The manufacturer or seller of a defective product may be liable to third parties as well as to purchasers, as privity of contract is not a requirement in a product liability case.
    Privity of Contract – the legal relationship between the parties to a contract.
  • Absolute Liability – responsibility without regard to fault or negligence. Absolute liability is rarely used in a court of law.
    absolute liability
    liability without fault; also known as liability without regard to fault or strict liability. Absolute liability is imposed in various states when actions of an individual or business are deemed contrary to public policy, even though an action may not have been intentional or negligent. For example, in product liability, manufacturers and retailers have been held strictly liable for products that have caused injuries and have been shown to be defective, even though the manufacturer or retailer was not proven to be at fault or negligent. In many states the owner of an animal is held strictly liable for injuries it may cause, even though it does not have a past history of violence.
    Explosive or highly flammable material – storing, possessing, maintaining or transporting explosives or inherently dangerous material
    Firearms – storage or use of firearms
    Animals – the keeping of dangerous animals – those that are wild or a type of animal inherently dangerous by their nature or training
  • Vicarious Liability – when a person or organization is held responsible for the actions of others
    Example: the liability of an employer for the conduct of its employees; the liability of a principal for the conduct of her agent.
    Respondeat Superior – Latin term that means “let the master respond”. The doctrine under which liability is imposed upon an employer for the acts of its employees committed in the course and scope of their employment. Similarly, respondeat superior makes a principal liable for a tort committed by her agent, and a master responsible for the negligence of his servant.
    Scope of Employment – A phrase referring to activities carried out by an employee in doing the work assigned to him by his employer. Under respondeat superior, an employer is not liable for injury inflicted by an employee acting outside of the “scope of his employment”. However, an employee’s acts where are merely incidental to his regular duties , but are of benefit to the employer, are generally deemed to fall within the scope of his employment.
    contingent liability (vicarious liability)
    liability incurred by a business for acts other than those of its own employees. This particular situation may arise when an independent contractor is hired. The business can be held liable for negligent acts of the contractor to the extent that its representatives give directions or exercise control over the contractor's employees.
  • Negligence – The failure to do something that a reasonable person would do in the same circumstances or the doing of something a reasonable person would not do.
    Negligence is a wrong generally characterized by carelessness, inattentiveness, and neglectfulness rather than by a positive intent to cause injury.
    Negligence per se – Negligence that is beyond debate because the law, usually a statute or ordinance, has established a duty or standard of care that the defendant has violated, as a result of which he has caused injury to the plaintiff. (Example: failure to stop at a stop sign, as required by law, which is the proximate cause of injury to another driver or pedestrian)
  • The response of insurance policies to liability is based on the concept of legal liability – the insured must be responsible for the damages to another that would be legally enforceable by the court of law.
    There are 3 types of Legal Liability:
    1. Tort – a civil wrong against another party.
    2. Violation of a Statute or Regulation makes a person responsible for damage
    Assuming liability of another through a contract
    Liability policies respond to torts or civil wrongs and limited contractual liability.
    Tort – A wrong involving a breach of duty and resulting in an injury to the person or property of another. A tort is distinguished from a breach of contract in that a tort is a violation of a duty established by law, whereas a Breach of Contract results from a failure to meet an obligation created by the agreement of the parties. Although the same act may be both a crime and a tort, the crime is an offense against the public which is prosecuted by the state in a criminal action; the tort is a private wrong that must be pursued by the injured party in a civil action.
  • Negligence -
    res ipsa loquitor
    Latin phrase for "The facts speak for themselves.“ This is a rule of evidence under which an individual is deemed, under certain specific circumstances, to be negligent by the mere occurrence of an accident. These circumstances are defined as when the law presumes that an accident could not have occurred had the individual not been negligent.
    When an instrumentality (i.e. a thing) causes injury, an inference or rebuttable presumption arises that the injury was caused by the defendant’s negligence, if the thing or instrumentality was under the exclusive control or management of the defendant and the occurrence was such as in the ordinary course of events would not have happened if the defendant had used reasonable care.
  • The first test of negligence is called the Prudent or Reasonable Person Concept.
    Prudent Person Concept – intuitive measure that tests a person’s action against the standard of how a prudent person would act in the same, or similar situation
    Reasonable Man Test – A standard for determining negligence, which asks: “What would a reasonable person have done in the same circumstances?” In short, it measures the failure to do that which a person of ordinary intelligence and judgment would have done in the circumstances, or the doing of that which a person of ordinary intelligence and judgment would not have done.
    Reasonable Woman Test – In determining whether a woman has been a victim of sexual harassment, or exposed to a hostile environment, the standard used by the EEOC is whether a “reasonable woman” (as opposed to “reasonable man”) would find the conduct offensive. In other words, although a male supervisor might feel it is perfectly acceptable to tell a woman who works for him that she has “great legs”, the woman might reasonable find this remark unacceptable.
  • Story – 4 women shopping & going to lunch. 3 are drunk, designated driver. Losses control of steering wheel, hits parked car.
    In order for negligence to be implied, there are 4 elements of negligence that must be met.
    Legal Duty or Standard of Care – must be a responsibility or legal duty between the person who commits the harm and the party claiming harm
    Standard of Care – the standard by which negligence is determined in a particular situation. Although the degree of care the law requires is always the care that a reasonable person would exercise in similar circumstances, the applicable standard differs with the circumstances.
    2, Breach of Duty – must be some breach or violation of the duty owed
    Breach of Duty – the failure to do that which a person is bound by law to do, or the doing of it in an unlawful manner.
    Proximate Cause – unbroken chain of events that cause damage
    Proximate Cause – as an element of liability in a tort case, that cause which, unbroken by any intervening cause, produced the injury, and without which the result would not have occurred; the primary cause; the efficient cause. Note that the proximate cause of an injury is not necessarily the final cause or the act or omission nearest in time to the injury.
    4. Actual Loss or Damage – sum of money that will compensate for damages incurred
    Actual Loss – the extent of an insurance company’s liability; the real loss, whether total or partial.
  • There are several defense mechanisms when negligence is alleged. However, every defense has a condition that must be met before the defense can be used. There are 6 defenses we will review.
  • The first is Assumption of Risk – where a defense can be made in the case of strict or absolute liability that the risk was known but the person used the product or exposed themselves to the dangers anyway.
    Assume you have a customer that has a dog. You are aware that the dog is left alone during working hours. The customer asks you to go to their home to repair the computer. When you enter the house, you are attacked by the dog and sue the homeowner. A defense is the assumption of risk – you were aware that there was a dog on the premises but you went to the house anyway.
    assumption of risk
    technique of risk management (better known as retention or self insurance ) under which an individual or business firm assumes expected losses that are not catastrophic losses through the purchase of insurance. For example, a business firm assumes the risk of its employees being absent because of minor illness, but buys disability insurance to cover absences due to extended illness. Also refers to (1) situations where insureds place themselves in situations that they realize pose a danger, and (2) the acceptance of risks by an insurance company.
  • 2. Contributory Negligence
    A. Defense – person or organization adds in any way to the injury and is barred from recovery
    B. Condition of Defense – person or organization must take steps to avoid injury, and if they contributed in any way to their own injury, they are not entitled to collect from another
    Contributory Negligence – In the law of negligence, a failure by the plaintiff to exercise reasonable care which, in part at least, is the cause of an injury. Contributory negligence defeats a plaintiff’s cause of action for negligence in states that have not adopted the doctrine of comparative negligence.
    contributory negligence
    principle of law recognizing that injured persons may have contributed to their own injury. For example, by not observing the "Don't Walk'' sign at a crosswalk, pedestrians may cause accidents in which they are injured.
    Story – Dick Spires story on the 2 kids in the t-top car who hit the telephone pole. Sued car manufacturer, pole manufacture & county. Who paid the claim?
  • A. Defense – Statutory modification of contributory negligence-both parties are negligent and damages are apportioned between them according to the degree of negligence
    B. Condition of Defense – victim’s contribution to the event is a reduction in the amount of payment - there is still recovery from the other party
    C. Comparative Negligence almost always bars recovery if a person is more than 50% or more at fault.
    Comparative Negligence – The doctrine adopted by most states that requires a comparison of the negligence of the defendant with the negligence of the plaintiff; the greater the negligence of the defendant, the lesser the level of care required of the plaintiff to permit her to recover. In other words, the plaintiff’s negligence does not defeat her cause of action, but it does reduce the damages she is entitled to recover.
    comparative negligence
    in some states, principle of tort law providing that in the event of an accident each party's negligence is based on that party's contribution to the accident. For example, if in an auto accident both parties fail to obey the yield sign, their negligence would be equal, and neither would collect legal damages from the other.
  • Acts of God or Nature
    A. Defense – an event produced by a physical cause of nature and not within human control or intervention
    B. Condition of Defense – Legal action can still be brought for negligence, however, if it was beyond the person’s control, and an act of nature was involved, this defense can be used.
    Act of God – An unusual, extraordinary, and unexpected act caused solely by the forces of nature. Examples: a storm; a bolt of lightning. A person cannot be held liable for an act of God.
    act of god
    natural occurrence beyond human control or influence. Such acts of nature include hurricanes, earthquakes, and floods.
  • Intervening Cause
    A. Defense – person or organization is not at fault because another cause is the ultimate reason that the damage occurred
    B. Condition of Defense – there must be evidence that another
    event was the ultimate reason that the loss occurred
    Intervening Cause – A cause that intrudes between the negligence of the defendant and the injury suffered by the plaintiff, breaking the connection between the original wrongful act or omission and the injury, and itself becoming the proximate cause of the injury.
    An example of intervening cause, Joe buys an electrical adapter to use in his office. The warning states that the adapter is to be used for low voltage office equipment only. Joe uses the adapter to hook up his computer, an office size refrigerator and a small microwave oven.
    One evening as Joe begins to close up shop, he smells smoke. An electrical fire ensues. Joe sues the manufacturer for negligence. In investigating the claim, the adjuster finds that the adapter was overloaded and reports this to the manufacturer. The lawyer enters a defense of an intervening cause being responsible for the fire.
  • Statute of Limitations – Federal and State statutes prescribing the maximum period of time during which various types of civil actions and criminal prosecutions can be brought after the occurrence of the injury of the offense.
    statute of limitations
    period, set by law, after which a damage claim cannot be made. Limits are set by individual states and usually range from one to seven years.
    In Virginia:
    §8.01-243 – Personal Action for Injury to Person or Property Generally –
    personal injuries, whatever theory of recovery – 2 years
    property injuries – 5 years after the cause of action accrues.
    Medical Malpractice – 2 years but there are certain exceptions
    Defense – time limit in which a legal action can be brought has expired
    Condition of Defense – must be legislation that sets a time limit based on the type of damage being alleged
  • A legal obligation imposed by contact (insurance policy).
    1. The benefits of purchasing liability insurance
    A. Payment of Claims
    B. Defense Costs
    1. Can be in addition to the limit of liability
    2. Insurance Company investigates the claim
    3. Hires attorneys and expert witnesses
    4. The insured must cooperate with the investigation
    defense costs
    expense of defending a lawsuit. To mount a legal defense against civil or criminal liability, a defendant faces expenses for lawyers, investigation, fact gathering, bonds, and court costs. Of critical importance in purchasing liability insurance is not only the limits of coverage under the policy but also the obligation of the insurance company to defend the insured against suits, even if a suit is without foundation. Because legal defense costs can be extremely high, the consumer should consider liability insurance that pays all defense costs in addition to the policy limits.
    C. Insurance Company is obligated to provide defense
    1. Defense costs may be unlimited (are they separate or included in the policy limit?)
    2. Insurance Company has control over what is spent on defense
    3. Duty to defend is broader than its potential duty to pay damages
    4. Insurance Company must defend the insured until it can be determined that the claim is not covered
    5. Duty to defend ends when the insurance company has used up the applicable limits of insurance in the payment of settlements or judgments
  • Damage is the amount of money that is awarded to an injured party because of their loss.
    three types of damages can be awarded to a plaintiff:
    Special Damages-reimbursement for out-of-pocket expenses, including medical bills, legal charges, cost of repairing damaged or destroyed property, and loss of current and projected income.
    General Damages-reimbursement for damages that do not readily lend themselves to quantitative measurement, commonly known as "pain and suffering."
    Punitive Damages-reimbursement for damages due to gross negligence by a defendant.
  • 1. Assess the damages in terms of money and attempts to restore the party to same financial condition that existed prior to a loss
    Special Damages – Damages that may be added to the general damages in a case, and arise from the particular or special circumstances of the case; the natural but not necessary result of a tort; damages arising naturally but not necessarily from a breach of contract. They can include: medical bills, loss of earnings, reduced earning capacity, and rehabilitation costs. Before special damages are paid, they must be incurred.
    compensatory damages
    civil damages
    sums payable to the winning plaintiff by the losing defendant in a court of law; can take any or all of these forms: general, punitive, and special.
  • General Damages – award based on intangible damages inferred from Special Damages and other facts and circumstances
    1. Pain and Suffering
    Disfigurement
    Pain & Suffering – a species of damages that one may recover for physical or mental “pain & suffering” that result from a wrong done or suffered. The loss of ability or capacity to work because of physical pain or emotional or mental suffering is a type of pain and suffering and a proper element of damages. Recovery for the pain and suffering of a deceased person is sometimes permitted by such person’s personal representative, though some states by statute forbid such a recover.
  • Punitive Damage – sum of money in excess of the amount required to compensate for loss - imposed to punish conduct and deter similar conduct in the future
    Such damages bear no relation to the plaintiff’s actual loss and are often called exemplary damages because their purpose is to make an example of the plaintiff to discourage others from engaging in the same kind of conduct in the future.
    1. Awarded for willful and/or complete disregard for another’s safety
    2. Punish offending party
    3. Punitive Damage payments by insurance companies are regulated by state legislations
    A. It must be legal to award punitive damages
    Most states can award punitive damage
    Massachusetts and Nebraska do not allow punitive damage awards
    Many states prohibit payment of punitive damage claims by insurers
    VA Statute §38.2-227 – Public Policy Regarding Punitive Damages: It is not against the public policy of the Commonwealth for any person to purchase insurance providing coverage for punitive damages arising out of the death or injury of any person as a result of negligence, including willful and wanton negligence, but excluding intentional acts.
    Do you know of any carriers who offer Punitive Damage coverage on their liability policies?
  • Limit – the maximum amount the policy will pay
    A. Liability policies usually contain more than one limit
    1. Per Occurrence or Accident – maximum payable out of a single occurrence of a covered loss
    2. Per Person – maximum payable to anyone person involved in one accident or occurrence
    3. Aggregate – maximum amount the policy will pay regardless of the number of losses during a policy period
  • Before we look at the application of limits, let’s look at the way policies are structured. It is common for many business policies, both automobile and general liability, to be set up on a combined single limit. This means there is one single limit that is applicable for both bodily injury and property claims. If the insured purchases a $100,000 CSL policy, they have $100,000 available to pay for both bodily injury and property damage.
    Most personal automobile policies are issued with split limits. There is a limit for Bodily Injury per Person, Bodily Injury per Accident and a separate limit for Property Damage.
    Now let’s see how they work.
  • In this case, Sue has an automobile accident where two people in the other care are injured. One has medical expenses of $20,000 and the other has medical expenses of $35,000. The car, costing $27,000 was totaled.
    How much will the insurance company pay based on the above stated limits?
    # 1 will receive $20,000 for medicals
    #2 will receive $25,000 for expenses – as the max per person is $25,000
    Property Damage of $20,000 max will be paid.
    That leaves a total of $17,000 not covered under this policy; the defendant/insured will be responsible for this out of pocket.
  • Now let’s assume that Sue had purchased the same policy with a $100,000 CSL. Since the only limitation in a CSL auto policy is the per occurrence limit, the entire $82,000 would be paid.
    The only policy that carriers a general aggregate is the Commercial General Liability and Umbrella policies. The aggregate is the most the policy will pay during the policy term regardless of the number of losses.
  • Transcript

    • 1. Legal Concepts ofLegal Concepts of Liability InsuranceLiability Insurance Professional Insurance AgentsProfessional Insurance Agents Association of VA/DCAssociation of VA/DC
    • 2. Course ObjectivesCourse Objectives  Four Types of ExposuresFour Types of Exposures  Test for negligenceTest for negligence  Defense and conditions for negligenceDefense and conditions for negligence  Duty to DefendDuty to Defend  Claims SettlementClaims Settlement  Payments by policy limit structurePayments by policy limit structure
    • 3. Liability InsuranceLiability Insurance Insurance for money the policyholder isInsurance for money the policyholder is legally obligated to pay because of bodilylegally obligated to pay because of bodily injury or property damage caused toinjury or property damage caused to another person and covered in the policy.another person and covered in the policy.
    • 4. Liability DefinedLiability Defined Legal responsibility for damages caused byLegal responsibility for damages caused by your actions or activities.your actions or activities.
    • 5. Types of LiabilityTypes of Liability 1.1. Strict LiabilityStrict Liability 2.2. Absolute LiabilityAbsolute Liability 3.3. Vicarious LiabilityVicarious Liability 4.4. NegligenceNegligence
    • 6. Strict LiabilityStrict Liability  A legal doctrine that makes some personsA legal doctrine that makes some persons responsible for damages their actions orresponsible for damages their actions or products cause, regardless of any “fault”products cause, regardless of any “fault” on their part.on their part.  Product LiabilityProduct Liability  Privity of ContractPrivity of Contract
    • 7. Absolute LiabilityAbsolute Liability  Liability for an injury whether or not thereLiability for an injury whether or not there is fault or negligence.is fault or negligence.  Similar to Strict LiabilitySimilar to Strict Liability  Application of Absolute LiabilityApplication of Absolute Liability  FirearmsFirearms  FireworksFireworks  AnimalsAnimals
    • 8. Vicarious LiabilityVicarious Liability  Liability imposed upon a person because of theLiability imposed upon a person because of the act or omission of another.act or omission of another.  Respondeat SuperiorRespondeat Superior  Also called Contingent LiabilityAlso called Contingent Liability  TypesTypes  General Contractor/Sub ContractorGeneral Contractor/Sub Contractor  Parent/ChildParent/Child  Employer/EmployeeEmployer/Employee
    • 9. NegligenceNegligence  Failure to exercise the degree of care anFailure to exercise the degree of care an ordinary, prudent person would use toordinary, prudent person would use to protect others from unreasonable risk ofprotect others from unreasonable risk of harm or injury.harm or injury.  Negligence per seNegligence per se
    • 10. Insurance Response to LiabilityInsurance Response to Liability  Legal Liability – liability to which aLegal Liability – liability to which a defendant in a civil action is exposed.defendant in a civil action is exposed.  Sources of LiabilitySources of Liability  TortTort  Statute or RegulationStatute or Regulation  ContractualContractual
    • 11. Res Ipsa LoquitorRes Ipsa Loquitor  ““The facts speak for themselves.”The facts speak for themselves.”  Rule of evidence under which anRule of evidence under which an individual is deemed, under specificindividual is deemed, under specific circumstances, to be negligent by thecircumstances, to be negligent by the mere occurrence of an accident.mere occurrence of an accident.
    • 12. Negligence TestsNegligence Tests  Reasonable Man Test / Prudent PersonReasonable Man Test / Prudent Person ConceptConcept  Reasonable Woman TestReasonable Woman Test
    • 13. Elements of NegligenceElements of Negligence 1.1. Legal Duty or Standard of CareLegal Duty or Standard of Care 2.2. Breach of DutyBreach of Duty 3.3. Proximate CauseProximate Cause 4.4. Actual Loss or DamageActual Loss or Damage
    • 14. Defending Negligence ClaimsDefending Negligence Claims 1.1. Assumption of RiskAssumption of Risk 2.2. Contributory NegligenceContributory Negligence 3.3. Comparative NegligenceComparative Negligence 4.4. Acts of GodActs of God 5.5. Intervening CauseIntervening Cause 6.6. Statute of LimitationsStatute of Limitations
    • 15. Assumption of RiskAssumption of Risk  The legal principal that a person whoThe legal principal that a person who knows and deliberately exposes herself toknows and deliberately exposes herself to a danger assumes responsibility for thea danger assumes responsibility for the risk, rather than the person who actuallyrisk, rather than the person who actually created the danger.created the danger.  Assumption of Risk is often referred to asAssumption of Risk is often referred to as Voluntary Assumption of Risk.Voluntary Assumption of Risk.
    • 16. Contributory NegligenceContributory Negligence  In the law of negligence, a failure by theIn the law of negligence, a failure by the plaintiff to exercise reasonable care which,plaintiff to exercise reasonable care which, in part at least, is the cause of an injury.in part at least, is the cause of an injury.  Contributory negligence defeats aContributory negligence defeats a plaintiff’s cause of auction for negligenceplaintiff’s cause of auction for negligence in states that have not adopted thein states that have not adopted the doctrine of comparative negligence.doctrine of comparative negligence.
    • 17. Comparative NegligenceComparative Negligence The doctrine adopted by most states that requiresThe doctrine adopted by most states that requires a comparison of the negligence of the defendanta comparison of the negligence of the defendant with the negligence of the plaintiff; the greaterwith the negligence of the plaintiff; the greater the negligence of the defendant, the lesser thethe negligence of the defendant, the lesser the level of care required of the plaintiff to permit herlevel of care required of the plaintiff to permit her to recover.to recover. Plaintiff’s negligence does not defeat her cause ofPlaintiff’s negligence does not defeat her cause of action, but it does reduce the damages she isaction, but it does reduce the damages she is entitled to recover.entitled to recover.
    • 18. Act of GodAct of God An unusual, extraordinary, and unexpectedAn unusual, extraordinary, and unexpected act caused solely by the forces of nature.act caused solely by the forces of nature. Examples include: a storm; a bolt ofExamples include: a storm; a bolt of lightning; flood, earthquake, hurricane.lightning; flood, earthquake, hurricane. A person cannot be held liable for an Act ofA person cannot be held liable for an Act of God.God.
    • 19. Intervening CauseIntervening Cause A cause that intrudes between theA cause that intrudes between the negligence of the defendant and the injurynegligence of the defendant and the injury suffered by the plaintiff, breaking thesuffered by the plaintiff, breaking the connection between the original wrongfulconnection between the original wrongful act or omission and the injury, and itselfact or omission and the injury, and itself becoming the proximate cause of thebecoming the proximate cause of the injury.injury.
    • 20. Statute of LimitationsStatute of Limitations Federal and State statutes prescribing theFederal and State statutes prescribing the maximum period of time during whichmaximum period of time during which various types of civil actions can bevarious types of civil actions can be brought after the occurrence of the injurybrought after the occurrence of the injury of the offense.of the offense.
    • 21. Duty to DefendDuty to Defend A legal obligation imposed by contractA legal obligation imposed by contract (insurance policy.)(insurance policy.) However, this duty ends when the insuranceHowever, this duty ends when the insurance company has used up the applicable limitscompany has used up the applicable limits of insurance in the payment of settlementsof insurance in the payment of settlements or judgments.or judgments.
    • 22. Understanding DamagesUnderstanding Damages Three types of damages can be awarded toThree types of damages can be awarded to a plaintiff:a plaintiff:  Compensatory DamagesCompensatory Damages  Special DamagesSpecial Damages  General DamagesGeneral Damages  Punitive DamagePunitive Damage
    • 23. Compensatory DamagesCompensatory Damages  Damages recoverable in a lawsuit for lossDamages recoverable in a lawsuit for loss or injury suffered by the plaintiff as a resultor injury suffered by the plaintiff as a result of the defendant’s conduct.of the defendant’s conduct.  Also called “Actual Damages”Also called “Actual Damages”  Special Damages may be added and ariseSpecial Damages may be added and arise from the particular or specialfrom the particular or special circumstances of the case.circumstances of the case.
    • 24. General DamagesGeneral Damages  Reimbursement for damages that do notReimbursement for damages that do not readily lend themselves to quantitativereadily lend themselves to quantitative measurement. Commonly known as “painmeasurement. Commonly known as “pain and suffering.”and suffering.”  Damages that are the natural andDamages that are the natural and probable result of the wrongful actsprobable result of the wrongful acts complained ofcomplained of
    • 25. Punitive DamagesPunitive Damages  Damages that are awarded over andDamages that are awarded over and above compensatory damages (actualabove compensatory damages (actual damages) because of the wanton,damages) because of the wanton, reckless, or malicious nature of the wrongreckless, or malicious nature of the wrong done by the defendant.done by the defendant.  Massachusetts & Nebraska do not allowMassachusetts & Nebraska do not allow punitive damage awards.punitive damage awards.  VA StatuteVA Statute §38.2-227§38.2-227
    • 26. Payment of DamagesPayment of Damages  Policy limit dictates maximum amount toPolicy limit dictates maximum amount to be paid.be paid.  Per Occurrence Or Per Person –Per Occurrence Or Per Person – maximum paid based on the incidentmaximum paid based on the incident  Aggregate – maximum paid during policyAggregate – maximum paid during policy term regardless of number of losses.term regardless of number of losses.
    • 27. Policy Limit StructurePolicy Limit Structure Will either be Split Limit or a CombinedWill either be Split Limit or a Combined Single Limit.Single Limit.
    • 28. Split LimitsSplit Limits Policy Limits Available:Policy Limits Available: $25,000 – BI per person$25,000 – BI per person $50,000 – BI Accident$50,000 – BI Accident $20,000 – PD Accident$20,000 – PD Accident Claim for Damages:Claim for Damages: # 1 - $20,000 medical# 1 - $20,000 medical #2 - $35,000 medical#2 - $35,000 medical $27,000 Prop Damage$27,000 Prop Damage
    • 29. Combined Single LimitCombined Single Limit Policy Limits Available:Policy Limits Available: $100,000 Per$100,000 Per OccurrenceOccurrence $100,000 Aggregate$100,000 Aggregate Claim for Damages:Claim for Damages: # 1 - $20,000 medical# 1 - $20,000 medical #2 - $35,000 medical#2 - $35,000 medical $27,000 Prop Damage$27,000 Prop Damage
    • 30. Questions???Questions???
    • 31. Thank you for attending!Thank you for attending! Please complete your coursePlease complete your course evaluations and leave them onevaluations and leave them on your way out!your way out!