Finance 431: Property-Liability Insurance Lecture 12: Commercial Liability InsuranceIntroductionLegal Liability Can Be Based OnLegal Liability Based On TortsLegal Liability Based On Torts – (2)Legal Liability Based on ContractsLegal Liability Based on StatutesFor question 1 do you think the storeowner should be liable?For question 1 on what grounds would the storeowner be liable?For question 2 do you think the storeowner should be liable?For question 2 on what grounds would the storeowner be liable?For question 3 do you think the storeowner should be liable?For question 3 on what grounds would the storeowner be liable?For question 4 do you think the sponsor should be liable?For question 4 on what grounds would the sponsor be liable?For question 5 do you think the storeowner should be liable?For question 5 on what grounds would the storeowner be liable?For question 6 do you think the storeowner should be liable?For question 6 on what grounds would the storeowner be liable?For question 7 do you think the landlord should be liable?For question 7 on what grounds would the landlord be liable?For question 8 do you think the actuary should be liable?For question 8 on what grounds would the actuary be liable?For question 9 do you think the writer should be liable?For question 9 on what grounds would the writer be liable?For question 10 do you think the jeweler should be liable?For question 10 on what grounds would the jeweler be liable?Elements of NegligenceDefenses to Negligence ActionsIntentional TortsIntentional Torts - continuedSlide 32Strict and Vicarious LiabilityPrincipal Liability Loss ExposuresFinance 431:Property-Liability InsuranceLecture 12:Commercial Liability InsuranceIntroduction•Legal liability is the responsibility, based in law, to remedy some wrong done to another person or organization.–Remedy can be•Monetary•Behavior–Based in law•Varies by locationThis lecture assumes you have read Chapter 7 – The Liability Risk in Risk Management and Insurance (covered in Fin 230)–If you did not take Fin 230, read this chapterLegal Liability Can Be Based On•Torts•Contracts•StatutesLegal Liability Based On Torts•Negligence–Unintentional tort involving failure to exercise reasonable care–Examples•Careless driving•Not cleaning sidewalk after snowstorm•Intentional torts–Intentional act that is wrongful and causes harm–Examples•Libel•False arrest•TrespassLegal Liability Based On Torts – (2)•Strict liability–Liability regardless of fault–Applies in cases of especially dangerous activities–Examples•Wild animals•Blasting•Vicarious liability–Liability based on the acts of others–Examples•Employer-employee•Principal-agentLegal Liability Based on Contracts•Breach of Contract–Professional liability•Hold Harmless and Indemnity Agreements–Indemnitor promises to pay indemnitee for loss sustained by indemnitee–Tenant’s liability to landlordLegal Liability Based on StatutesWorkers’ Compensation LawsOther StatutesUniform Aeronautics LawAuto LiabilityFor question 1 do you think the storeowner should be liable?A) YesB) NoFor question 1 on what grounds would the storeowner be liable?A) NegligenceB) Intentional tortC) Strict liabilityD) Vicarious liabilityE) None of the aboveFor question 2 do you think the storeowner should be liable?A) YesB) NoFor question 2 on what grounds would the storeowner be liable?A) NegligenceB) Intentional tortC) Strict liabilityD) Vicarious liabilityE) None of the aboveFor question 3 do you think the storeowner should be liable?A) YesB) NoFor question 3 on what grounds would the storeowner be liable?A) NegligenceB) Intentional tortC) Strict liabilityD) Vicarious liabilityE) None of the aboveFor question 4 do you think the sponsor should be liable?A) YesB) NoFor question 4 on what grounds would the sponsor be liable?A) NegligenceB) Intentional tortC) Vicarious liabilityD) ContractE) None of the aboveFor question 5 do you think the storeowner should be liable?A) YesB) NoFor question 5 on what grounds would the storeowner be liable?A) NegligenceB) Intentional tortC) Strict liabilityD) StatuteE) None of the aboveFor question 6 do you think the storeowner should be liable?A) YesB) NoFor question 6 on what grounds would the storeowner be liable?A) NegligenceB) Intentional tortC) Strict liabilityD) Vicarious liabilityE) None of the aboveFor question 7 do you think the landlord should be liable?A) YesB) NoFor question 7 on what grounds would the landlord be liable?A) NegligenceB) Intentional tortC) Strict liabilityD) Vicarious liabilityE) None of the aboveFor question 8 do you think the actuary should be liable?A) YesB) NoFor question 8 on what grounds would the actuary be liable?A) NegligenceB) Intentional tortC) Vicarious liabilityD) ContractE) None of the aboveFor question 9 do you think the writer should be liable?A) YesB) NoFor question 9 on what grounds would the writer be liable?A) NegligenceB) Intentional tortC) Vicarious liabilityD) ContractE) None of the aboveFor question 10 do you think the jeweler should be liable?A) YesB) NoFor question 10 on what grounds would the jeweler be liable?A) NegligenceB) Intentional tortC) Strict liabilityD) ContractE) None of the aboveElements of Negligence1 - A legal duty owedCommon lawStatutes2 - Breach of that duty3 - DamagesCompensatorySpecial damages (measurable)General damages (intangible)Punitive damages4 - Casual connectionDefenses to Negligence ActionsContributory negligenceComplete defenseComparative negligenceReduces recoveryAssumption of riskStatutes of limitationsImmunitiesGovernmental agencies, public officialsIntentional TortsIntentional torts against the personAssault and batteryFalse imprisonment and false arrestDefamationLibel and slanderInvasion of right of privacyIntrusion on solitude or seclusionPhysical invasionPublic disclosure of private factsUnauthorized release of confidential informationIntentional Torts - continuedFraudBad FaithInterference with Relationships Between OthersInjurious falsehoodUnfair competitionInterference with employmentInterference with copyright, patent or trademarkIntentional Torts - continuedMisuse of legal processMalicious prosecutionMalicious abuse of processIntentional torts against propertyTrespassReal propertyPersonal propertyConversionNuisanceStrict and Vicarious LiabilityStrict liability tortsAbnormally dangerous instrumentalitiesUltrahazardous activitiesDangerously defective productsVicarious