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

Policy in which a premium (the deposit) is paid in the first policy year, in addition to the regular term insurance premiums required. The deposit is left to accumulate at interest for a ...

Cash carried forward from the previous year, plus gains from operations for the current year, plus any capital gains. ...

Specific time at which the insurance policy coverage begins and ends. ...

Coverage for equipment normally carried from location to location by a physician or surgeon; written on an all risks basis to include supplies and scientific books used in medical practice. ...

Same as term: Free Examination "free Look" Period: right, in most states, of an insured to have 10 days in which to examine an insurance policy, and if not satisfied, to return it to the ...

Modification of the charitable remainder uni-trust through which the beneficiaries receive a specified percentage of the assets' value in the trust usually paid out on a quarterly basis. If ...

Monetary fund established to pay for claims that the insurance company is aware of (claims incurred or future claims) but that the insurance company has not yet settled. This reserve is ...

Circumstance in which an insurance company can issue life or health insurance to an applicant based on standards set by the company. ...

interconnection of computers that contain pages classified into groups called web sites that can be accessed over the internet. The only requirement for visiting a web site is to have ...

Popular Insurance Questions