8.1 Negligence, Torts, and Legal Liability

Sources of Legal Liability

A person can become legally obligated to pay damages in three ways, and the P&C exam tests the difference because liability policies respond only to legal obligations, never to merely moral ones.

• Tort — a civil wrong (other than breach of contract) for which the law allows a remedy. Most liability claims are torts.
• Contract — liability assumed by agreement (a 'hold harmless' clause). Covered under CGL Coverage A only as an insured contract.
• Statute — liability imposed by law, such as workers compensation or dram-shop liquor liability.

Trap: A defendant who feels morally responsible but is not legally liable triggers no coverage. Liability forms pay sums the insured 'becomes legally obligated to pay as damages.'

The Three Categories of Torts

Absolute (strict) liability applies without proving fault — for ultrahazardous activities (blasting, keeping wild animals) and for defective products. The claimant need only show the activity or product caused harm.

The Four Elements of Negligence

To win a negligence suit the claimant (plaintiff) must prove all four elements. Memorize the order; questions remove one element and ask whether liability exists.

1. Duty owed — a legal obligation to act with reasonable care toward others.
2. Breach of duty — failing to meet that standard of care.
3. Proximate cause — an unbroken chain of causation linking the breach to the harm; the harm must be a foreseeable result.
4. Damages — actual, measurable injury or loss occurred.

If any element is missing there is no negligence and the insurer owes nothing. A breach that causes no damages, for instance, produces no liability.

The Standard of Care

The baseline is the reasonable person standard — what an ordinary, prudent person would do under the same circumstances. Professionals (doctors, accountants, agents) are held to the higher standard of a reasonable member of their profession; failing it is malpractice, covered under professional liability rather than the CGL.

Res Ipsa Loquitur

Latin for 'the thing speaks for itself.' When an injury is of a type that ordinarily does not occur without negligence, and the instrumentality was under the defendant's exclusive control, the burden shifts to the defendant to prove they were not negligent. A surgical instrument left inside a patient is the classic example.

Proximate Cause and Intervening Acts

Proximate cause is the legal link between the breach and the harm. It is not merely 'but-for' causation; the harm must be a reasonably foreseeable consequence of the breach. An intervening (superseding) cause — an unforeseeable event that breaks the chain — can relieve the original wrongdoer of liability.

• If a store leaves a wet floor unmarked and a shopper slips, the slip is a foreseeable result — proximate cause is met.
• If, instead, an unrelated lightning strike injures the shopper, that is a superseding cause and the store is not liable for it.

Negligence Per Se and Attractive Nuisance

Two special doctrines surface on the exam:

• Negligence per se — violating a safety statute (e.g., a building code) is treated as negligence in itself; the breach element is presumed.
• Attractive nuisance — a landowner can be liable to trespassing children drawn by a dangerous condition (an unfenced pool), because their presence is foreseeable. This raises the duty owed to child trespassers above the ordinary 'no duty to trespassers' rule.

Trap: Ordinary adults owed minimal duty as trespassers; attractive nuisance is the exception for children attracted to a hazard.

Duty of Care by Class of Entrant

Property (premises) liability — the heart of CGL and homeowners Section II claims — scales the duty of care to the status of the person entering, a frequent exam distinction:

Quick Answer: A paying customer is an invitee owed the highest duty; a social guest is a licensee; an uninvited entrant is a trespasser. The injured party's status decides how much care the owner owed.

Strict Liability and Statutory Liability in Depth

Beyond negligence, two fault-free liability routes appear on the exam:

• Strict (absolute) liability attaches without proof of fault for abnormally dangerous activities (blasting, storing explosives, keeping wild animals) and for defective products. A products claimant need only show the product was defective and caused harm — not that the manufacturer was careless.
• Statutory liability is imposed by law regardless of fault, such as workers compensation (employer liability for job injuries) and dram-shop/liquor-liability statutes (a tavern liable for serving an obviously intoxicated patron who later causes harm).

Liability insurance responds to legal obligations from any of these sources — tort, contract, or statute — but it never pays a purely moral obligation. When a scenario describes someone who 'feels responsible' but bears no legal duty, the correct answer is that no coverage is triggered because there is no legally enforceable obligation to pay damages.