Adbanker- Casualty/liability Insurance Basics

In an insurance contract, the 1st Party refers to the Insured, which includes the individuals covered by the policy under 'You and Yours'. The Insurance Company is the 2nd Party, the Beneficiary is usually a separate party who benefits from the policy, and the Third Party is a term used for individuals or entities not directly involved in the insurance contract.

In an insurance context, the 2nd Party refers to the Insurance Company who provides coverage and services to the policyholder.

The 3rd party in a legal dispute refers to an individual or entity that is not directly involved in the case but may be affected by its outcome. The injured 3rd party is someone who has suffered harm or loss as a result of the events leading to the dispute.

A Liability/Casualty Policy is specifically designed to cover damages to a 3rd party in case of injuries or accidents, rather than covering damages to your own property, providing health insurance, or offering financial protection against losses or theft.

Personal Injury refers to harm caused to a person's reputation or character, not physical harm or damage to belongings.

Property Damage (PD) specifically refers to damage caused by the insured to someone else's property, not their own property, injury to others, or loss of personal belongings.

Tort Law focuses on civil wrongs, such as negligence or intentional harm, between individuals, while Criminal Law deals with offenses against the state, Contract Law involves agreements between parties, and Property Law addresses issues related to ownership and use of property.

Common Law refers to the body of law developed and established through judicial decisions and precedents rather than through legislation. This system relies on the principle of stare decisis, which means previous decisions serve as binding authority in similar cases.

Negligence is distinct from intentional acts, accidents, and carelessness, as it specifically refers to the failure to meet the standard of care expected of a reasonable and prudent person.

Contributory negligence is a legal concept that limits an injured party's ability to recover damages if they are found to have contributed to their own injury or damage. This places some responsibility on the injured party for their actions that led to the incident.

An intervening cause is something that disrupts the expected sequence of events leading to a particular outcome.

The Statute of Limitations refers to the time period within which an injured party can settle their claim or sue. It is a legal timeframe that dictates how long after an incident a lawsuit can be filed.

Strict liability refers to holding a party responsible for damages or injuries caused by their product, regardless of fault or intent. This legal concept shifts the burden of proof from the injured party to the manufacturer, requiring them to prove that their product was not defective or unreasonably dangerous.

Absolute liability refers to the responsibility for damages or injuries that can be imposed on an individual regardless of fault, making it different from the traditional fault-based liability system. It typically applies in high-risk situations where the likelihood of harm is high, such as owning a wild animal or in cases of work injuries covered under Workers' Compensation.

Vicarious liability is a legal concept that holds one party responsible for the actions of another party, typically seen in employer-employee or insurer-agent relationships.

Split Limit refers to the practice of dividing the coverage limits for different types of liabilities in an insurance policy, such as Bodily Injury (BI) per person, BI per occurrence, and Property Damage (PD) per occurrence. This provides more flexibility and coverage options for policyholders based on their individual needs.

Compensatory damages are designed to compensate the injured party for the actual loss or harm suffered as a result of the wrongful conduct of the defendant, rather than to punish the defendant like punitive damages. They are typically categorized into special damages (specific economic losses) and general damages (non-economic losses), aiming to make the injured party whole again.

Special damages are meant to cover actual economic losses incurred by the plaintiff, such as hospital bills and repair bills. They do not include compensation for emotional distress, punitive damages, or lost wages during a recovery period.

General damages cover non-monetary losses such as pain and suffering or defamation without the need for specific bills or receipts.

Supplemental Payments in insurance refer to additional expenses covered by the insurer that are beyond the limits of liability. These payments are provided automatically by the insurer without any limit and include costs such as court costs and investigative costs.

In this case, liability refers to being legally responsible for something, such as the payment in the contract scenario.

Legal liability specifically refers to the legal responsibility an individual or entity has for someone's injuries and/or property damage. It is the obligation to compensate or make amends for harm caused due to negligence or wrongdoing.

Damages in insurance refer to loss in property or bodily injury, for which the insured may become obligated to pay through settlement or judgment. The insurer has the authority to either settle or defend the liability claims.

Severability allows the insurer to handle claims for each insured individually, rather than grouping them together.

Combined Single Limit (CSL) is a provision in liability insurance policies that combines the Bodily Injury per occurrence and Property Damage per occurrence into a single total limit. This simplifies the coverage and potentially increases the amount available for claims compared to splitting the limits between Bodily Injury and Property Damage.