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exam 1 chp 19
risk management 4000 exam 1
Undergraduate 2

Additional Insurance Flashcards




legal wrong

a violation of a person's legal rights, or failure to perform a legal duty owed to a certain person or to sociery as a whole. 


1) crime:  a legal wrong against sociery that is punishable by fines, imprisonment, or death. 

2) a breach of contract: is another class of legal wrongs

3) tort : a legal wrong which law allows a remedy in the form of money damages. 

what are the 3 types of torts?

1) intentional torts : intentional act

ex: assualt, battery, patent/copyright infringement, trepass, 


2) strict liability (absolute liability):

liability is imposed regargless of negligence or fault. ex: product manufacturing, workers compensation


3) negligence: failure to protect others from harm. if your actions are below the actions of a reasonably prudent person then you may be found negligent. 

**the plantiff must prove of the tortfeasors negligence.


4 elements of negligence:



1) existence of a legal duty

ex:  driving within speed limit; stopping at a red light

2) failure to perform that duty

positive acts: acts you DID commit that a reasonable person wouldnt like not stopping at a red light

negative acts: acts you DID NOT do that a reasonable person would like not getting faulty brakes fixed. 

3) damage or injury to the claimant

*compensatory damages include special and general damages and are awards that compensate injured victims for losses incurred. 

-special damages:awards for losses that can be determined and documented such as medical expenses, lost earnings, and property damage.

-general damages: awards that cannot be specifically measured or itemized, such as compensation for pain or suffering (death). 

-punitive damages: awards designed to punish someone and organizations. these awards are often several times the amt awarded for compensatory damages. 

4) proximate cause relationship : is cause unbroken by any new and independent cause, which produces an event that otherwise would not have occured. 

ex: a drunk driver that runs a red light and kills another motoris. 

Defenses against Negligence

1) Contributory negligence: if you contributed in any way to your own injury, you cannot collect damages. 

ex: if your taillights are broken and the person behind did not realize you were stopping, you could not collect damages for being injured. 


2) Comparative Negligence: if both the plantiff (injured person) and the defendant (person causing injury)  contribute to the plantiffs injury, the financial burden of the injury is shared by both parties according to their respective degrees of fault. 

*pure rule: recover money proportionally

*50 rule: if you are 49% or less you recover

*51 rule: if you are 50% or less you recover


3) Assumption of Risk: a person who understands  and recognizes the danger inherent in a particular activity cannot recover damages in the event of an injury. 

ex: you are teaching a friend how to drive with a vision impairment, and he crashes and injures you. you cant sue because he would probably use the assumption of risk.


4) Last clear chance rule: a plantiff who is endangered by his or her own negligence can still recover damages from the defendant if the defendant has a last clear chance to avoid the accident but fails to do so. 

ex: you jaywalk across the road walking to marketing even though its a red light. the car coming clearly sees you and has enough time to stop by fails to do so. you could recover damages under last clear chance. 

imputed negligence

*means can be attributed to another person.


1) employer-employee relationship: if an employee drives a company car and injures someone then the employer could be held legally liable. (must be acting within scope of employment though)


2) Vicarious Liability: the owner of the car is vicariously responsible if they let someone else drive the car and they injure someone or get into an accident.


3) Dram Shop Laws: a business that sells liqour such as a bar, and keeps serving a person even though they are wasted and then they go drive drunk and kill 3 people, the bar could be held liable. 

Res Ipsa Loquitur

"The thing speaks for itself"


**this accident or injury normally would not have occured if the defendant had not been careless. 

ex: a dentist extracts wrong tooth; a doctor does a surgery on the wrong patient or leaves a surgical sponge in the patient. 


3 requirements must be met to be res ipsa loquitur:


  1. normally doesnt occur in the absence of negligence
  2. the defendant has exclusive control over causing the accident
  3. injured party did not contribute in any way

applications of negligence--property owners


3 groups of people


1. trespassers: people who enters or remains on the owners property without the owners consent.

-owe them a slight duty of care. the owner does not have an obligation to the trespasser to keep the land in reasonably safe condition but they owe a slight duty of care because they cannot directly injure the person. 


2. Liscensee: person who enters owners property with the occupants expressed or implied permission. ex: firefighters, door to door salesmen, religious solicitiors, police men, social guests.

-must let them know of any unsafe conditions on the property that they should be aware of. 


3. invitee: a person who is invited onto the premises for the benefit of the occupants.

ex: store customers, mail men, garbage men. 

-must let them know of any unsafe working conditions and also has an obligation to inspect premises and eliminate any dangerous condition.


**attractive nuisance: any condition that can attract and injure children.  must keep premises in a safe condition. 

ex: swimming pools, trampolines. 

4 special cases of governmental liability

1. governmental liability

-doctrine of sovereign immunity states that local, state, and federal governments cannot be sued and have immunity from lawsuits. 

*a govt unit CAN BE held liable if it is negligent in the performance of a proprietary function. ex: seats collapse at a rock concert

*govt functions such as planning a sewer system cannot be sued against. 


2. Charitable Institutions:

-one time were immune from lawsuits. 

-today they can be, ex: a church sponsoring an event such as bingo night and somebody gets hurt, they can be held liable.


3. Employer and Employee Relationships: 

emplyer can be held legally reliable if the employee injures someone while acting within the scope of their employment.


4. Owners of Animals: 

owners are STRICTLY LIABLE for the injuries of others even if the animals are domesticated.

--can even be imposed on dog owners. in 1/3 of states only have to prove that the dog injured you not that the dog is a dangerous pet who bites people alot. 

3 Problems with Tort Liability

1. Rising Costs: the legal costs of settling lawsuits is enormous. rising medical costs. "forum shopping" is where people shop around for the best insurance/deal.

2. inefficiency in compensating injured victims: the present system is inefficient in compensating injured victims. the # of class action lawsuits has increase over time. attorneys receive a large and disproportionate share of the total settlement. 

injured victims receive less than half of each tort dollar paid. 


3. Long delays in settiling lawsuits:

cases take months or years to settle

Tort Reform Proposals:

1. caps on punitive damages: punitive damages are sometimes so large compared to compensatory damages that they bear little to no relationship at all. 

2. caps on non-economic damages, such as pain and suffering (general damages)

3. Increased use of alternative dispute resolution (ADR): ADR is a technique for resolving a legal dispute without going through legal procedures such as court. 

*arbitration: in which parties in a dispute agree to be bound by the decision of an independent third party. 

* meditation: a neutral third party tries to arrange a settlement through negotiation between the disputing parties without resorting to the courts

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