3.2 Washington General Liability Insurance

Negligence and Apportionment of Fault

Washington decides liability claims under pure comparative negligence (RCW 4.22.005): a claimant's award is reduced by their own share of fault, with no percentage bar. The bigger commercial-liability issue, however, is how fault is split among multiple defendants.

From Joint-and-Several to Several Liability

Before 1986, any defendant even slightly at fault could be forced to pay the entire judgment (joint and several liability), then chase the others for contribution. Washington's 1986 Tort Reform Act (RCW 4.22.070) changed the default rule to several (proportionate) liability — each defendant pays only their own percentage of fault.

When Joint-and-Several Liability Still Applies

The statute carves out exceptions where defendants remain jointly and severally liable:

Trap: Many candidates assume Washington is still a joint-and-several state. It is not — proportionate (several) liability is the default; joint liability is the exception, most importantly when the plaintiff bears zero fault.

Commercial General Liability (CGL)

The Commercial General Liability (CGL) policy is the workhorse of business casualty coverage, providing Coverage A (bodily injury and property damage), Coverage B (personal and advertising injury), and Coverage C (medical payments).

Occurrence vs. Claims-Made

Claims-made forms use a retroactive date and may need tail coverage (an Extended Reporting Period) when the policy ends. Washington requires these features to be clearly disclosed so the insured understands the difference.

Required Policy Elements

• Per-occurrence limit and aggregate limit clearly stated
• Coverage territory defined
• Whether defense costs are inside or outside the limits
• Pollution exclusion and its scope disclosed

Rate Regulation by the OIC

Commercial liability rates are regulated by the Office of the Insurance Commissioner (OIC) under a file-and-use system (RCW 48.19). The insurer files the rate; it may be used immediately or after a short waiting period, and the OIC reviews it afterward. By statute, no rate may be excessive, inadequate, or unfairly discriminatory — the three-part rate standard the exam tests repeatedly. The OIC may order a rate withdrawn if it fails the standard.

Professional Liability (Errors & Omissions)

Professional liability — also called Errors and Omissions (E&O) or, for physicians, medical malpractice — covers economic harm caused by professional mistakes rather than the bodily-injury/property-damage focus of a CGL. These policies are almost always written on a claims-made basis.

Medical Malpractice Specifics

Washington requires a certificate of merit and, for many claims, attempted mediation before trial. The statute of limitations is generally three years from the act, or one year from discovery, capped by an eight-year statute of repose (RCW 4.16.350). A producer placing physician coverage should match the policy's retroactive date to the doctor's first date of practice to avoid a gap.

Environmental and Pollution Liability

Standard CGL forms contain a broad absolute pollution exclusion, so environmental risk is usually transferred to specialty Environmental Impairment Liability (EIL) or pollution legal liability policies.

The Model Toxics Control Act (MTCA)

Washington's Model Toxics Control Act (MTCA, RCW 70A.305) — passed by voter initiative in 1988 — governs contaminated-site cleanup. Its liability standard is severe:

• Strict liability — fault need not be proven.
• Joint and several liability — any one responsible party can be forced to fund the entire cleanup.
• Retroactive — applies to historical contamination.

Potentially Liable Parties include current and past owners, operators, generators, and transporters. Property sales trigger disclosure obligations, and underground storage tanks carry their own registration and financial-responsibility rules. Because MTCA cleanup costs can dwarf policy limits, producers should flag any client handling fuels, solvents, or chemicals for dedicated pollution coverage.

Punitive Damages

A key Washington distinction: punitive damages are generally NOT recoverable under Washington common law. Courts award them only where a specific statute authorizes them (such as certain consumer-protection or wage claims). Because punitive damages are largely unavailable, the recurring multi-state debate over whether they are insurable rarely arises here.

Trap: Material lifted from other states' courses often claims punitive damages are freely insurable in Washington. The accurate statement is that Washington courts seldom allow punitive damages at all, so the insurability question is mostly moot. When statutory penalties do apply, intentional or fraudulent conduct remains uninsurable as a matter of public policy.