Liability

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Liability

• Risk/Loss Control

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Overview to Risk Control

• Risk/Loss Control
• Prevent losses from occurring
• Reduce the severity of losses that occur
• Sprinklers
• Seat belts

• Risk Financing
• Provide means for paying for losses that occur
• Hold harmless agreement
• Retention
• Insurance

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Vicarious Liability

• Liability for the negligent actions of others.

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Contractual Liability

• Contractual agreement to assume financial
  responsibility for another partys losses.

• Indemnity Agreement
• Hold Harmless Agreement

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WC and Employers Liability

• Strict liability - Workers compensation laws.
• Insurance policy contains

• Part I Workers Compensation
• Part II Employers Liability
• Dual Capacity
• Suit by a third party

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Automobile Liability

• Liability can arise out of the ownership,
  maintenance, and use of automobiles.
• Automobile liability system
• Tort
• No-fault

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Other Liability Exposures
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Other Liability Exposures
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Completed Operations Liability

• Products-Completed Operations Hazard has its
  own aggregate policy limit.
• Similar to operations liability, but covers
  injury or damage arising out of completed work
  performed away from the premises.

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Characteristics of Liability Loss Control

• Control of Loss Events
• Engineering Education
• Eng Mechanism that requires two hands to operate
• Employees might try to circumvent?
• Educate 0 tolerance
• Balance between the two
• Haddon improve the engineering/design
• Helps reduce insurance rates (e.g., gear covers)
• Behavior keep in check vs. air bags, anti-lock
  breaks, etc
• Schedule rating vs. Experience rating

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Characteristics of Liability Loss Control

• Role of Management
• Mgt Getting desired results through people
• Underwriters concerned with Mgt attitude
• Wisconsin Study Nothing as important as _____
• Applying Risk Control
• Historical Information (flobee elevator door)
• Acknowledge and encourage info from employees
• Near misses and losses that were prevented
• Educate other Executives about money saved via
  prevention
• Like studying and getting an Aso easy

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Characteristics of Liability Loss Control

• Dealing with Claimants
• HOW a claim is dealt with is good predictor of
  SIZE of claim
• Communicate with injured party
• Compensate valid injuries
• Fight fraudulent claims

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Risk Control Techniques

• Avoidance
• Deciding not to produce a product,
• Prevention
• The Club,
• Reduction
• Sprinklers, seat belts,
• Duplication
• Computer disks/data
• Segregation/Separation
• Group members traveling to event
• Employees in different work locations

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Controlling WC EL

• Big Risk for Employers
• High frequency
• Loss control efforts can have big impact
• Large employers might self insure
• Heinrich
• Studied costs associated with employee injury
• Direct WC benefits (med, income, rehab, death)
• Indirect
• Relationship between Indirect and Direct X
  times?

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Controlling WC EL

• Loss Control Policy Statements
• Describes objectives, activities, who, standards,
  measurement of compliance
• Loss and Hazard Analysis
• Analyze past losses and hazards that led to
• Who, what happened, time/day, where, how, unsafe
  action?, equipment defect?, environment factors?
• Failure Mode and Effect Analysis
• Fault Tree Analysis

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Controlling Other Exposures

• Product Liability
• Premises Operations Liability

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CGL Example