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44 Cards in this Set
- Front
- Back
liability loss
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any loss that a person or an organization sustains as a result of a claim or suit against that person or organization by someone seeking damages or some other remedy permitted by law
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legal liability
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legally enforceable obligation of a person or organization to pay a sum of money (damages) to another person or organization
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civil law
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classification of law that applies to legal matters not governed by criminal law and that protects rights and provides remedies for breaches of duties owed to others
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criminal law |
branch of the law that imposes penalties for wrongs against society |
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tort |
wrongful act or an omissio, other than a crime or a breach of contract, that invades a legally protected right |
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negligence |
the failure to excercise the degree of care that a reasonable person is a similar situation would excercise to avoid harming. |
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intentional tort |
a tort committed by a person who forsees that his or her act will harm another person |
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strict liability |
liability imposed by a court or by a statute int he absense of fault when harm results from activities or dondtions that are extremely dangerous, unnatural, ultrahazardous, extraordinary, abnormal, or inappropriate |
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contract |
legally enforceable agreement between 2 or more parties in which each party makes some promises |
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breach of contract |
the failure, without legal excuse, to fulfill a contractual promise |
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hold harmless agreement (indemnity agreement |
a contractual provisious that obligates one of the parties to assume the leagal liability of another party |
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contractual liability |
liability assumed through a hold-harmless argreement |
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statute |
a written law passed by a legislative body at either the state or federal level |
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what costs might result from a liabilityclaim? |
costs of investigate and defense as well as any damages that the insured may be found liabile for |
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how can business experience liablity loss even when not found legally liable |
business can have a liability loss bc it has experience the cost of investigating and defending the suit |
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identify elembent os the tort of negligence |
* duty owed to another person * breatch of that duty *close connection between the negligent act and resulting harm * occurrence of actuall loss or damage recognized by law and measurable by money |
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major categories of commercial liability loss exposures |
* premises and operations * products and completed operations * automobile * workers comp * management * professional * environmental * marine * aircraft |
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2 circumstances that premises and operations liability exposures related to pd and bi |
1. premises or operations
2. products or completed operations |
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3 elements a plaintiff must prove in order to recover prducts liability sute based on strict liability tort |
1. product was defective when left manfacture's custody 2. defective condition made the product unreasonably dangerous 3. defective product wwas the proximate cause of plaintiff's injury |
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common law approach to imposing auto liabiity on basis of auto ownership |
ownership itself does not make owner liable for injuyt or damages caused by someone else's negligent operations |
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what must a plaintiff show to establish an auto owners's liablity for negligent entrustment |
plaintiff must show that the party entrusting the vehicle knew or shoudl have known o the driver's incompetence, inexperience or reckless tendencies |
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how under auto no fault law, verbal threshold differs from monetary damage threshold |
verbal threshold defines the seriousness of injuries beyond which the right to sue is allowed. monetary damages threshold sets dollar limit that accident victim can sue |
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situations where employer might be sued by eemployee for work related injury |
1. injury to employee was intentional 2. employee's injury caused by employer's negligence 3. injury resulted from employer's negligence while acting in some capacity other than employer |
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risk control |
a conscious act or decision nto to act that reduces the frequency and/or severity of losses or make losses more predictable |
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risk management |
process of making and implementing decisons that will minimize the adverse effects of accidental losses on an organization |
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root cause |
event or cicumstance that directly leads to an occurrence |
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loss prevention |
risk control technique that reduces the frequency of a particular loss |
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loss reduction |
risk control technique that reduces the severtiy of a particular loss |
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avoidance |
risk control technique that involves ceasing or never undertaking an activity that the possibility of a future loss occuring from that activity is eliminated |
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3 major tenets that support a risk control program |
1. liability expoure presented by the producats and activities of many organizations have potential to cause harm. 2. exposures that develop along the loss continuum can result in significant financial consequences 3. poor safetly records can cause reputational damage |
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benefits of integrating risk control analysis and techniques |
will yield more efficient and safer operation |
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benefits of involving staff when starting a risk control program |
give employees sense of ownership in the program. also can identify the root causes of accidents and determine obstacles |
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5 general considerations that need to be evaluated in the development of any risk control technique |
1. cost effectiveness 2. legal requirements 3. requirements and recommendations of the organization's insurers 4. company's image 5. degree of risk aversion of an organization's senior management |
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role of claims management in risk control program |
technique of mitigating the effects of losses after they occur. also provide information after accident to determine root cause to prvent from happening in the future. |
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common law system |
legal sysem in which the body of law is derived more from court decisions as opposed to statutes or constitutions |
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tort law |
branch of civil law that deals with civil wrongs other than breach of contract |
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statutory law |
formal laws or statutes enacted by federal state or local legislative bodies |
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purpose of regular inspections and use of a form |
used to guide a complete assessment and proper documentation |
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3 aspects of special hazard areas that should be reviewed during inspections |
1. safety procecures 2. proper housekeeping 3. protective features |
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challenge of off premises liability exposure |
some are more difficult to control thant those that occure on own premises |
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liability standard that applies to products liability |
strict liability which focuses on the inherent safetly of the product itself rather than the conduct of the manufacturer |
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why does risk control play a more siginicant role in reducing accidents in the operation of motor vehicles than in many other activities |
people have a high level of control over how to drive. people make decisions that can reduce or create liability |
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what is the ideal safetly culture within an organization |
one in which employees are not only concerned for their owne safetly but also that of their co workers |
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importance of firewals and antivirus software as risk control techniques for an oganization's cyber risk loss exposure |
can mitigate the possibility of intrusiion into an organization's computer network by third party. |