Key Takeaways
- Arizona follows a pure comparative negligence system allowing recovery even at 99% fault
- Commercial general liability policies use file and use rate regulation
- Arizona abolished joint and several liability for most cases - defendants pay only their share
- Professional liability insurance is required for certain licensed professions
- Punitive damages are generally not insurable in Arizona due to public policy
Arizona General Liability Insurance
Arizona has specific requirements for general liability insurance that agents must understand.
Pure Comparative Negligence
Arizona uses pure comparative negligence:
How It Works
- Fault is allocated among all parties
- Damages reduced by percentage of fault
- No bar to recovery regardless of fault percentage
- Can recover even if 99% at fault (only 1% of damages)
Several Liability in Arizona
Arizona uses several liability (not joint and several):
| Feature | Description |
|---|---|
| General Rule | Each defendant pays only their percentage |
| Joint Liability | Abolished for most cases |
| Exception | Acting in concert or intentional conduct |
| Effect | Cannot collect entire judgment from one defendant |
Example
If Defendant A is 60% at fault and Defendant B is 40% at fault:
- Defendant A pays 60% of damages
- Defendant B pays 40% of damages
- Plaintiff cannot collect 100% from either defendant alone
Commercial General Liability (CGL)
Arizona CGL policies must comply with state requirements:
Required Elements
- Occurrence vs. claims-made coverage clearly disclosed
- Coverage territory defined
- Limits per occurrence and aggregate
- Defense costs—duty to defend
- Pollution exclusion with disclosure
Rate Regulation
Under file and use:
- Rates filed with DIFI
- Can be used immediately
- Subject to post-implementation review
- Must be actuarially justified
Professional Liability
Arizona requires or regulates professional liability for various professions:
State Requirements
| Profession | Requirement |
|---|---|
| Attorneys | Must disclose if no malpractice coverage |
| Architects | Required for state contracts |
| Engineers | Required for state contracts |
| Real Estate Agents | Recovery fund provides some protection |
| Insurance Agents | E&O strongly recommended |
Punitive Damages
Unlike some states, Arizona generally does NOT allow insurance for punitive damages:
Arizona Rule
| Feature | Details |
|---|---|
| Insurability | Generally NOT insurable |
| Public Policy | Punitive damages meant to punish - allowing insurance defeats purpose |
| Coverage | Most policies exclude punitive damages |
| Exception | Vicarious liability for punitive damages may be covered |
Key Differences from Other States
- Arizona is more restrictive than Texas (which allows punitive damage insurance)
- Public policy against insuring one's own intentional wrongdoing
- Vicarious liability (employer for employee) may still be covered
Products Liability
Arizona products liability insurance:
Coverage
- Bodily injury from defective products
- Property damage from defective products
- Products-completed operations hazard
- Aggregate limits apply
Arizona Law
- Strict liability for manufacturing defects
- Negligence or strict liability for design defects
- Statute of repose: Products manufactured more than 12 years ago generally protected
- Statute of limitations: 2 years from injury
Medical Malpractice
Arizona has specific medical malpractice requirements:
Key Provisions
- No caps on damages (unlimited recovery)
- Certificate of merit required to file suit
- Expert witness requirements
- Statute of limitations: 2 years from discovery
Under Arizona law, are punitive damages generally insurable?
If a defendant is 30% at fault under Arizona's several liability rule, what portion of damages do they pay?
What type of comparative negligence does Arizona use?