Casualty Insurance Basics
Negligence and liability
Liability insurance responds to legal liability for injury to others. Negligence requires four elements: duty owed, breach of that duty, proximate cause, and damages. Related doctrines appear in questions: negligence per se (violating a statute), res ipsa loquitur (the thing speaks for itself), attractive nuisance, vicarious liability (employer for employee), and strict/absolute liability (Illinois dog-bite liability under the Animal Control Act, and the Dramshop Act for alcohol sales).
Defenses and comparative fault
Illinois uses modified comparative negligence: a plaintiff who is more than 50% at fault recovers nothing; at 50% or less, damages are reduced proportionally. Contrast with pure comparative (recovery reduced regardless of percentage) and contributory negligence (any fault bars recovery). Assumption of risk and statute of limitations are also defenses.
Damage types
Compensatory damages include special (medical bills, lost wages - provable dollars) and general (pain and suffering). Punitive damages punish; most liability policies exclude them or treat them separately.
Liability policy structure
Liability coverage pays third-party claims plus defense costs, which are usually in addition to the limit on an occurrence basis. Know occurrence vs claims-made triggers, per-occurrence vs aggregate limits, split limits (25/50/20), and combined single limits. Key exclusions: intentional acts, expected injury, your work, your product, auto, workers' compensation, and contractual liability (unless an insured contract).
Worked example: A driver is 40% at fault in an Illinois accident with $100,000 in damages. Because fault is 50% or less, the plaintiff recovers $100,000 × 60% = $60,000. At 55% fault, recovery would be zero.