Essentials of Legal Liability
Three sources of legal liability
A liability claim must rest on a legal theory. Tort liability comes from a civil wrong independent of contract - negligence, intentional acts, or strict liability. Contractual liability is assumed, typically through an indemnity or hold-harmless agreement. Statutory liability is imposed by law, such as workers compensation or dram shop acts. Insurance policies respond differently to each, so identify the theory first.
Negligence in four elements
Duty (a legal obligation to act as a reasonable person), breach, causation, and damages. Causation has two parts: actual cause ("but for") and proximate cause (foreseeable consequence). A candidate should be able to walk through all four elements and spot which one is missing.
Defenses and shared fault
Contributory negligence (a complete bar in a few jurisdictions), comparative negligence (reduces the award, with modified versions barring recovery above a threshold), assumption of risk, and statutes of limitation. Other traps: employers are generally liable for employees' negligent acts within the scope of employment (vicarious liability) but not for independent contractors; res ipsa loquitur lets a court infer negligence when the instrumentality was under the defendant's exclusive control; strict liability applies to abnormally dangerous activities and defective products without any showing of negligence.
Rule of thumb
Before discussing coverage, ask three questions: Who owed a duty to whom? What conduct breached that duty? What damages flowed from the breach? If any answer is unclear, the claim is probably not a simple negligence claim.
Worked example. A store mops a floor and posts no warning; a customer falls and breaks a wrist. Duty: owed to invitees. Breach: no warning. Cause: the wet floor caused the fall. Damages: $18,000 in medical bills. If the customer was 20% at fault under comparative negligence, recovery is reduced to $14,400.