Cpcu 552 - Commercial Liability Risk Management And Insurance

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Liability Loss

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Any loss that a person/organization sustains because of a claim or suit against itby someone seeking damages or other remedy.

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Legal Liability

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The legally enforceable obligation of an organization or person to pay damages(money) to another person or organization.

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Civil Law

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A classification of law that applies to matters not governed by criminal law that protects rights and provides remedies for breach of duties owed to others.

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Criminal Law

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The branch of law that imposes penalties for wrongs against society.

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Tort

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A wrongful act or omission, other than a crime or a breach of contract, which violates the legal rights of another.

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Negligence

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The failure to exercise the degree of care that would be exercised by a reasonably prudent person under similar circumstances in order to avoid hurting another.

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Intentional Torts

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When a person foresees (or should have foreseen) that his or her action would harm another.

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Strict Liability (Absolute Liability)

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Liability imposed by a court or statute without regard to fault when harm results from activities/conditions that are extremely dangerous, unnatural, ultrahazardous, extraordinary, abnormal, or inappropriate.

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Contract

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A legally enforceable agreement between two or more parties in which they each make some promise to the other.

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Breach of Contract

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The failure, without legal excuse, to fulfill a contractual promise.

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Hold-harmless Agreement (Indemnity Agreement)

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A contractual provision that obligates one of the parties to assume the legal liability of another party.

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Contractual Liability

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Liability assumed through a hold-harmless agreement.

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Statute

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A written law passed by a legislative body at the state or federal level.

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Risk Control

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A conscious act or decision not to act that reduces the frequency and/or severity of losses or makes losses more predictable.

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Risk Management

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The process of making and implementing decisions that will minimize the adverse effects of accidental losses on an organization.

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Root Cause

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The event or circumstance that directly leads to an occurrence.

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Loss Prevention

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A risk control technique that reduces the frequency of a particular loss.

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Loss Reduction

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A risk control technique that reduces the severity of a particular risk.

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Avoidance

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A risk control technique that involves ceasing or never undertaking an activity so that the possibility of a future loss occurring from that activity is eliminated.

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Common-law System

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A legal system in which the body of law is derived more from court decisions as opposed to statutes or constitutions.

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Tort Law

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The branch of civil law that deals with civil wrongs other than breaches of contract.

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Statutory Law

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The formal laws, or statutes, enacted by federal, state, or local legislative bodies.