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 Real Estate Terms

Generic name given for any association of property owners sharing an interest in commonly owned property. Community associations may be developed in condominium, cooperative, or housing ...

The land-to-building ratio is a means to calculate in percentage how much a structure occupies the total land parcel on which it is located. It is the total building area as a percentage of ...

Individual who gives false statements under oath, which is a criminal act punishable by imprisonment and fine. An example is signing a tax return that fraudently understates rental income, ...

Loan such as a mortgage that the borrower has consistently made payments on when due over many years. The borrower has proven his creditor worthiness. ...

Owned by one individual or sole ownership. ...

Affordability is a term used to describe the ability of a person or entity to pay in relation to the income earned by them. Affordability is the comparison of a person's income against ...

The word’s etymology reflects several diverse or seemingly unrelated topics under the same umbrella. As part of everyday discourse, you’ll find the term “omnibus” ...

To understand the definition of the term demised premises, one must understand what demise means. Because demised premises is a widespread use for the term demise. The demised premises ...

Amount the taxpayer gets back when he or she files the tax return at the end of the reporting year because taxes were overpaid for that year. The tax overpayment equals the tax payments ...

Popular Real Estate Questions