8.1 Negligence, Torts, and Legal Liability
Key Takeaways
- Liability insurance pays only for legal obligations arising from tort, contract, or statute — a moral promise to pay is not covered
- Torts divide into intentional acts (usually excluded by expected/intended injury language), negligence (the core of liability coverage), and strict/absolute liability (fault not required)
- Negligence requires all four elements — Duty, Breach, Causation, and Damages (DBCD); missing any one defeats the claim
- Causation has two layers: cause in fact (but-for test) and proximate/legal cause (foreseeability); a superseding intervening event can break the chain
- The reasonably prudent person sets the duty standard; res ipsa loquitur and negligence per se help plaintiffs prove breach when facts are sparse
Liability insurance is not charity — it is a contract to defend and indemnify the insured when they become legally obligated to pay damages to someone else. On the Nevada Property & Casualty combo exam (141 scored questions, scaled passing score of 70), national Casualty Terms and Policy Provisions domains repeatedly test whether you can trace a claim from a real-world accident to a covered legal duty. Before you memorize CGL limits in later chapters, you must understand where legal liability comes from and why negligence dominates the casualty side of the outline.
Three Roots of Legal Liability
Every third-party claim the insurer might pay grows from one of three sources:
| Source | How It Arises | Insurance Angle |
|---|---|---|
| Tort | Civil wrong other than breach of contract | Most BI/PD and many PAI claims |
| Contract | Voluntary assumption of obligation | Covered only through an insured contract on the CGL |
| Statute | Duty imposed by law | Workers compensation, dram shop, environmental statutes |
Exam trap: Liability coverage does not pay because the insured feels guilty or wants to preserve a customer relationship. If no legal duty exists, there is no insurable liability — only a voluntary payment the policy does not require.
Tort Categories: Intentional, Negligent, and Strict
A tort is a private civil wrong for which the law provides a remedy, usually money damages.
| Category | Mental State | Typical Example | Coverage Pattern |
|---|---|---|---|
| Intentional tort | Deliberate act | Assault, battery, false imprisonment | Generally excluded by expected or intended injury language |
| Negligence | Careless, not deliberate | Slip-and-fall, rear-end collision | Core of liability insurance |
| Strict (absolute) liability | Fault irrelevant | Ultrahazardous blasting, wild-animal ownership, defective product | Liability attaches without proving negligence; often still covered |
The ISO Commercial General Liability form (CG 00 01) and Homeowners form (HO 00 03) exclude injury expected or intended from the standpoint of the insured. That is why a fistfight is excluded but a careless push that accidentally knocks someone down a stairwell may still trigger Coverage A.
Several intentional torts — libel, false arrest, malicious prosecution — can be restored under Personal and Advertising Injury (Coverage B), which you will study in section 8.4.
Negligence and the Four DBCD Elements
Negligence is the failure to exercise the care a reasonably prudent person would use under similar circumstances. The plaintiff must prove all four elements. Miss one, and the case fails.
- Duty — a legal obligation to conform to a standard of conduct owed to the plaintiff (landowner to invitee, driver to other motorists).
- Breach — conduct falling below that standard (failing to repair a broken handrail, texting while driving).
- Causation — the breach was both the factual and legal cause of harm.
- Damages — measurable injury or loss. No damages, no case — even if conduct was sloppy.
Causation: Two Tests
Cause in fact uses the but-for test: but for the defendant's breach, would the injury have occurred? Proximate (legal) cause asks whether the harm was a foreseeable consequence of the breach.
- Intervening cause (foreseeable): A negligent driver hits a utility pole; a live wire falls and burns a bystander. The fire may still be foreseeable — chain intact.
- Superseding cause (unforeseeable): A shopkeeper negligently leaves a crate in an aisle; an hour later an earthquake collapses the ceiling on the customer. The earthquake may break proximate causation even if the crate was a but-for factor.
Nevada scenario: A Reno retail tenant fails to salt an icy loading dock after a winter storm (breach). A delivery driver slips and fractures a wrist (damages). Duty to business invitees is clear. Causation usually holds because a fall on ice is foreseeable. This is textbook negligence — the kind of fact pattern that feeds both a tort suit and a CGL claim.
Standards, Professionals, and Shortcuts
The reasonably prudent person is an objective standard — not the defendant's personal best effort.
- Professionals (physicians, architects, accountants) are measured against a reasonable member of their profession — the foundation of malpractice and errors-and-omissions coverage.
- Children are generally judged as a reasonable child of similar age, unless engaged in an adult activity such as operating a motor vehicle.
Two doctrines ease the plaintiff's burden:
- Res ipsa loquitur ("the thing speaks for itself") — negligence may be inferred when the event ordinarily does not happen without negligence, the instrument was under the defendant's exclusive control, and the plaintiff did not contribute. Classic example: a surgical instrument left inside a patient.
- Negligence per se — violating a safety statute designed to protect the class of persons injured (running a red light) may establish breach automatically.
Pitfall: Vicarious liability is not a fourth tort type — it is a way one party is held responsible for another's tort, covered in section 8.2.
Strict Liability and Products
Strict liability imposes responsibility without proof of negligence because the activity or product is so dangerous that the law assigns fault regardless of care.
Common exam triggers:
- Ultrahazardous activities — blasting near a Summerlin construction site, storing explosives.
- Wild or abnormally dangerous animals — keeping a non-domesticated animal that injures a guest.
- Products liability — manufacturing defect (item differs from design), design defect (entire line unreasonably dangerous), failure to warn (inadequate instructions). Manufacturing and design theories often sound in strict liability; failure to warn may sound in negligence.
Contractual Liability and the Insured Contract
The CGL excludes most contractual liability — obligations voluntarily assumed — except through an insured contract, a defined list including:
- Lease of premises
- Sidetrack agreements
- Easement or license agreements
- Obligations to indemnify a municipality
- That part of any contract where the insured assumes the tort liability of another to pay damages for BI or PD
A promise merely to perform work is not an insured contract. A promise to stand in another's shoes for tort damages may be.
Damages Vocabulary Before Defenses
Tort damages the policy may respond to include:
- Compensatory — make the victim whole: special (economic: medical bills, lost wages) plus general (non-economic: pain and suffering).
- Punitive — punish willful or gross misconduct; uninsurable in many states as public policy.
- Nominal — token sum when a legal wrong occurred with minimal measurable loss.
Because damages are the fourth negligence element, a defendant who breaches a duty but causes no injury has committed no actionable negligence. Liability insurance is loss-driven — it pays sums the insured is legally obligated to pay, not amounts offered out of goodwill.
How This Fits the Nevada Exam
National casualty domains test whether you can classify the wrong (intentional vs. negligent vs. strict), walk through DBCD on a short fact pattern, and spot causation traps. Nevada statute chapters later add producer duties and unfair-claims concepts, but the negligence skeleton is national. When you see a scenario on the Pearson VUE exam, label the tort type first, then ask whether the expected or intended exclusion might apply before you select a coverage part.
Memory anchors: DBCD for negligence · but-for plus foreseeability for causation · legal liability only · insured contract exception for assumed tort liability.
A Las Vegas café owner deliberately punches a customer during an argument. Under standard homeowners or CGL expected/intended injury language, coverage for the customer's broken jaw is most likely:
Which element of negligence is missing if a property owner fails to fix a loose railing but no person is injured?
A surgeon leaves a sponge in a patient during an operation. The patient did not see the error occur. Which doctrine may allow the patient to infer negligence?
Under the CGL, contractual liability is generally excluded EXCEPT when the obligation arises from: