Casualty Insurance Basics and Liability Concepts
Negligence
Four elements: duty owed, breach of duty, proximate cause, and actual damages. Defenses include contributory negligence (complete bar in a handful of jurisdictions), comparative negligence (pure or modified - damages reduced by the plaintiff's percentage, or barred above a threshold), assumption of risk, and the statute of limitations. Res ipsa loquitur shifts the burden to the defendant when the injuring instrumentality was in the defendant's exclusive control. Vicarious liability holds an employer responsible for employees acting within the scope of employment.
Damages
Special damages are economic and measurable (medical bills, lost wages). General damages are non-economic (pain and suffering). Punitive damages punish intentional or grossly reckless conduct and are frequently excluded or sublimited.
Liability policy structure
Insuring agreement (duty to pay on behalf of the insured), supplementary payments (defense costs, bail bonds), limits, exclusions, and conditions. Triggers differ: an occurrence policy responds to injury during the policy period whenever the claim surfaces; a claims-made policy responds when the claim is made, subject to the retroactive date and any extended reporting period. Limits form a hierarchy: per person caps inside per occurrence, which caps inside the aggregate. A self-insured retention is paid by the insured before the policy responds.
Rule of thumb
Read limits largest to smallest: the aggregate caps the policy year, the occurrence caps one event, and the per-person limit caps one claimant.
Trap: defense costs are typically paid in addition to the limit and do not reduce it - do not deduct them when computing available limits.