Absolute Liability In Insurance

Definition of "Absolute liability in Insurance"

Josh Raymond real estate agent

Written by

Josh Raymondelite badge icon

Christian Shane Properties

The absolute liability in insurance can be defined as actions, inactions, or negligence that leads to losses or damages to a third-party. The insurer is obligated to determine the third-party affected by the damage that occurred while the insured party violated the insurance policy. The term can be used by insurance companies in malpractice cases, car accidents with an innocent party as a victim, etc. Absolute liability is imposed on the accused party, and legal actions can result from such a situation. The desire to harm or cause damage is irrelevant in the case of absolute liability, as an absolute liability can occur even without intent.

The party that is considered of absolute liability can be a person or a company. Either can be blamed for potentially dangerous or hazardous practices that caused harm or injury to another entity, property, or individual. The nature of absolute liability does not require proof of culpability or confirmation of negligence to judge liability.

When is Absolute Liability Imposed?

The following situations can lead to an individual or a company to be held liable based on the definition of liability and regardless of whether or not they had malicious intent.

  • Injuries suffered by employees while working;
  • Wild or dangerous animals that are in someone’s legal custody that cause harm to property or individuals;
  • Manufacturing or storing flammable materials or explosives that explode and cause harm to property or individuals;
  • Commercializing defective or harmful products that cause harm to others.

Each of the situations listed above is considered highly dangerous and extreme examples, and the law of absolute liability is enforced. The company or individual will be held responsible for those instances regardless of whether they tried to prevent the harm from occurring or if it was an accident. The reason for that is the fact that they created the opportunity that leads to the damage or harm of someone or something. In these cases, the insurance company can deny the insured to get coverage for a breach of policy. However, the third party will be covered by the insurance company up to the statutory limits.

Instances when Absolute Liability is excluded

While the examples above show instances when absolute liability is applied, there are some exceptions to the rule. Some special considerations are needed when particularities change.

  • From the wild and dangerous animals rule the exclusions are pets; however, if a dog bites someone and the owner was aware of the dog’s tendencies, the owner is held liable;
  • From the defective or harmful products rule the exclusion happens if the affected party can not provide evidence that the product is faulty and causes harm.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Insurance Terms

In general, a civil wrong, other than breach of contract, for which a court will provide a remedy in the form of a suit for damages. Torts include negligent acts or omissions on the part of ...

Insurance policy for which the required premium has been paid. ...

Over a long period of time, the average loss an individual, individuals, or an organization can expect to incur from a particular exposure. ...

Share of a variable dollar annuity paid to an annuitant as an income payment. ...

new dividend option under which the policyowner allows the dividends from the participating policy to be applied for the purposes of accumulating cash values. ...

in PERSONAL PROPERTY insurance, coverage is for personal property items that are movable, that is, not attached to the building's structure (the home), such as television sets, radios, ...

For loss of an obligee in the event that the principal fails to perform according to standards agreed upon between the obligee and the principal. ...

Legal case in which the United States Supreme Court held that pension assets are to be excluded from the bankruptcy estate of the plan participant. ...

One of four SEC divisions charged with regulating investment companies, investment advisers, and variable insurance products. The SEC requires variable insurance products to register with ...

Popular Insurance Questions