8.1 Negligence, Torts, and Legal Liability
Key Takeaways
- Liability insurance is third-party coverage paying damages the insured is legally obligated to pay for BI or PD to others.
- The four elements of negligence are duty, breach, proximate cause, and damages — all four must be proven by the plaintiff.
- Torts fall into three categories: negligence (unintentional), intentional torts, and strict/absolute liability.
- Strict liability imposes responsibility without fault for abnormally dangerous activities and defective products.
- Civil tort suits use the preponderance-of-the-evidence standard, not the criminal beyond-a-reasonable-doubt standard.
Liability Insurance and the Law of Torts
Liability insurance is third-party coverage: it pays sums the insured becomes legally obligated to pay as damages to someone else because of bodily injury or property damage. Unlike first-party property coverage (which pays the insured directly), the loss is owed to an outside claimant. Almost all personal and commercial liability policies — the Homeowners Section II (ISO HO-3, HO 00 03 10 11), the Personal Auto Policy (PAP, ISO PP 00 01) Part A, and the Commercial General Liability (CGL, ISO CG 00 01 04 13) — are built on the same legal foundation: the law of torts.
A tort is a civil wrong, other than breach of contract, for which the law provides a remedy in the form of money damages. Tort liability is the single largest driver of liability claims, and exam questions test the structure of negligence relentlessly.
Three Sources of Legal Liability
| Source | Basis | Example |
|---|---|---|
| Torts | Civil wrong (negligence, intentional, strict) | Customer slips on wet floor |
| Contracts | Liability assumed by agreement | Lease hold-harmless clause |
| Statutes | Liability imposed by law | Dram shop / workers comp |
Most liability insurance responds to tort liability. Coverage for liability assumed under contract is narrower — the CGL only covers an insured contract as defined in the policy.
The Four Elements of Negligence
Negligence is the failure to exercise the degree of care a reasonably prudent person would use under similar circumstances. It is unintentional — carelessness, not deliberate harm. To win a negligence suit, the plaintiff must prove all four elements. Miss one and the claim fails.
- Duty — a legal obligation to act with reasonable care (a driver owes other motorists a duty).
- Breach — failure to meet that duty (texting while driving).
- Proximate cause — the breach was the direct, unbroken cause of the harm (the distracted driver hit the pedestrian).
- Damages — actual, measurable injury or loss (medical bills, lost wages, property repair).
Memory Trap
Students confuse proximate cause with mere "actual cause." Proximate cause requires an unbroken chain with no superseding intervening event. If a wholly unforeseeable event breaks the chain, proximate cause — and therefore liability — is defeated even though a duty was breached.
- Duty + Breach + Proximate Cause + Damages = Negligence
- All four required; the burden of proof is on the plaintiff
- Standard of proof in civil tort suits is preponderance of the evidence (>50%), not the criminal "beyond a reasonable doubt"
Categories of Torts
Exams distinguish three tort categories because each triggers coverage differently.
Negligence (Unintentional Torts)
The core of liability insurance. Coverage is designed for fortuitous, accidental harm. The CGL insuring agreement responds to bodily injury or property damage caused by an occurrence, defined as an accident.
Intentional Torts
Deliberate acts — assault, battery, libel, slander, false imprisonment. Liability policies generally exclude expected or intended injury (CGL Exclusion a.). However, personal and advertising injury coverage (CGL Coverage B) deliberately covers certain otherwise-intentional offenses such as libel, slander, and false arrest.
Strict (Absolute) Liability
Liability without regard to fault — the defendant is liable even if reasonable care was used. Applies to abnormally dangerous activities (blasting, keeping wild animals) and products liability. A manufacturer of a defective product is strictly liable; the plaintiff need not prove negligence, only that the product was defective and caused harm.
Trap: Strict liability does not require proof of breach of duty — that is what "without fault" means. Don't pick a four-element answer for a strict-liability fact pattern.
The Four Elements of Negligence (Memorize as a Chain)
Liability under negligence requires all four links: (1) a legal duty owed to the claimant; (2) a breach of that duty (the failure to act as a reasonably prudent person); (3) proximate cause connecting the breach to the harm without an intervening superseding cause; and (4) actual damages. Break any link and the claim fails. The exam tests this as a missing-element puzzle: a careless act that causes no injury is not actionable negligence because element four (damages) is absent.
Sources of Liability and Tort Categories
Legal liability arises from three sources: common law (court-developed duties), statutory law (legislated duties such as dram-shop acts), and contractual (assumed) liability (a hold-harmless agreement that shifts another party's liability to you). A CGL's Coverage A insures contractually assumed liability under an "insured contract."
Torts split into intentional (assault, libel, slander — note these often map to CGL Coverage B personal/advertising injury, not Coverage A), unintentional (negligence — the bulk of liability claims), and strict (absolute) liability (imposed without fault for ultrahazardous activities, defective products, or keeping wild animals). Strict liability is the answer whenever the facts stress "abnormally dangerous" with no proof of carelessness.
Negligence Per Se and the Reasonable-Person Standard
The breach element is measured against the reasonable, prudent person standard — what an ordinarily careful person would have done in the same circumstances.
Negligence per se shortcuts proof of breach: when a defendant violates a safety statute designed to protect the class of persons harmed, the breach is established by the violation itself (running a red light that injures a pedestrian). Professionals are held to the standard of their profession, not the layperson, which is why malpractice is a specialized negligence claim. Tie this back to the four elements — per se proves breach but the plaintiff still must show duty, causation, and damages.
A pedestrian sues a driver for negligence. The driver clearly ran a red light (breach of a duty owed), but the pedestrian suffered no measurable injury or loss. What is the most likely outcome?
A demolition company uses explosives to bring down a building, injuring a bystander despite taking every reasonable precaution. Which liability theory most likely applies?