Key Takeaways
- North Carolina follows a pure contributory negligence system for all liability claims
- Commercial general liability policies use file and use rate regulation
- North Carolina has specific requirements for pollution liability disclosure
- Professional liability insurance is required for certain licensed professions
- Joint and several liability is modified in North Carolina
North Carolina General Liability Insurance
North Carolina has specific requirements for general liability insurance that agents must understand.
Pure Contributory Negligence
North Carolina uses pure contributory negligence for all liability claims:
How It Works
- Fault is assessed for all parties
- ANY fault by the plaintiff bars recovery
- Complete bar to recovery, not just reduction
- Applies to all negligence claims
Defenses Available
Under contributory negligence:
| Defense | Effect |
|---|---|
| Contributory Negligence | Complete bar if plaintiff ANY % at fault |
| Assumption of Risk | Complete bar if risk knowingly assumed |
| Last Clear Chance | Exception allowing plaintiff recovery |
Last Clear Chance Doctrine
North Carolina recognizes the last clear chance doctrine:
- If defendant had the last clear chance to avoid injury
- And failed to do so
- Plaintiff may still recover despite own negligence
- Limited exception to contributory negligence bar
Commercial General Liability (CGL)
North Carolina 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 NCDOI
- Can be used upon filing
- Subject to post-implementation review
- Must be actuarially justified
Professional Liability
North Carolina requires or regulates professional liability for various professions:
State Requirements
| Profession | Requirement |
|---|---|
| Attorneys | Must carry malpractice insurance |
| Architects | E&O for licensed practice |
| Engineers | E&O for licensed practice |
| Real Estate Agents | Errors and omissions required |
| Insurance Agents | Recommended but not required |
Joint and Several Liability
North Carolina has modified joint and several liability:
Current Rule
| Defendant Fault | Liability Rule |
|---|---|
| Joint tortfeasors | Each liable for their share |
| Contribution | Right to contribution from other defendants |
| Indemnity | Full shifting in some cases |
Practical Effect
- Multiple defendants may be liable
- Each pays their proportionate share
- Right of contribution exists among defendants
- Plaintiff must collect from each defendant
Pollution Liability
North Carolina has specific pollution liability requirements:
Disclosure Requirements
- Pollution exclusion must be disclosed
- Environmental impairment liability options explained
- Underground storage tank requirements
- Cleanup cost coverage options
NC Environmental Regulations
- CERCLA and North Carolina equivalents apply
- NC Department of Environmental Quality (DEQ) oversight
- Strict liability for certain hazardous activities
- Site cleanup requirements
Products Liability
North Carolina products liability insurance:
Coverage
- Bodily injury from defective products
- Property damage from defective products
- Products-completed operations hazard
- Aggregate limits apply
North Carolina Law
- Strict liability NOT adopted in NC for products
- Negligence standard applies
- Breach of warranty claims available
- Statute of repose: 6 years for products (with exceptions)
Exam Tip: Unlike many states, North Carolina has NOT adopted strict liability for products. Product liability claims must be based on negligence or breach of warranty.
Has North Carolina adopted strict liability for products liability?
What is the "last clear chance" doctrine in North Carolina?