Casualty Insurance Principles and Negligence/Liability Concepts
Legal foundations
Casualty insurance responds to the insured's legal liability. Torts are intentional, negligent, or strict liability. Negligence requires four elements: duty owed, breach of that duty, proximate cause, and actual damages. Res ipsa loquitur lets negligence be inferred from the circumstances; negligence per se arises from violating a statute designed to protect the class of persons injured.
Defenses and liability theories
Defenses include assumption of risk, contributory or comparative negligence, and no duty (trespasser versus invitee). Wisconsin uses modified comparative negligence: damages are reduced by the plaintiff's percentage of fault, and a plaintiff whose fault exceeds the defendant's - 51% or more - recovers nothing. Vicarious liability holds one party liable for another's acts (respondeat superior, negligent entrustment, attractive nuisance).
Damages and liability policy mechanics
Compensatory damages are special (medical bills, lost wages) or general (pain and suffering); punitive damages punish. Liability policies carry per-occurrence and aggregate limits, and the duty to defend is broader than the duty to indemnify. Defense costs are usually paid in addition to the limit and erode the aggregate only if the form says so. Occurrence policies respond to injury during the policy period; claims-made policies respond when the claim is made, subject to a retroactive date.
Traps
Questions test who is liable versus who is insured, and whether defense costs sit inside or outside the limit.
Worked example: Plaintiff is 30% at fault and suffers $100,000 in damages. Under modified comparative negligence the plaintiff recovers $70,000 because fault does not exceed the defendant's.