What Does “Liability” Mean In Insurance?

Liability: it may seem as though every discussion you have about your accident revolves around that word. Everyone wants to know who bears liability for the accident: your attorney, the insurance companies, and anyone who seeks to help you recover the compensation you deserve for your injuries. Even your health insurance company may ask you about who bears liability for the accident as you seek help covering those medical bills.

Just what does liability mean, anyway?

The general definition of liability means “the state of being legally responsible for something.” In the case of an insurance claim, liability means that the party described by that term bears legal responsibility for the actions that caused another party’s injuries or severe property damage.

What Does Liability Insurance Cover?

Liability insurance covers the costs incurred by someone injured by the actions of the covered individual.

For example, a general liability car insurance policy covers the cost of damages in accidents caused by the insured. Liability-only insurance often does not cover damage suffered by the insured: for example, liability insurance on a vehicle usually covers the damage to the victim of the accident, but will not cover losses suffered by the party that caused the accident.

Liability insurance often depends heavily on the specific coverage carried by the liable party. Some individuals may carry higher coverage than others, especially when it comes to auto insurance. Generally, coverage falls into two key categories.

Special Damages

Special damages in a liability claim include the direct financial losses suffered by a victim in an accident. That may include specific categories, which you may want to discuss with a personal injury lawyer before you move forward with a liability claim.

Property Damage

Often, serious incidents can lead to severe property damage. In a car accident, for example, the same accident that causes immense injury to the victim may also cause serious damage to the victim’s vehicle. Those vehicle damages may mean substantial financial losses if the victim has to pay those costs alone.

Liability insurance, however, frequently covers some or all of the cost of those repairs, alleviating the strain on the victim.

Medical Bills

Many types of serious accidents result in substantial injuries. Those injuries can change the course of the victim’s life and have a heavy impact on the victim’s financial future. Medical costs can go up exponentially for individuals with serious injuries, including spinal cord injuries or traumatic brain injury related to a serious accident. Most liability policies include some compensation for medical costs related to accidents caused by the covered entity.

Keep in mind, however, that most insurance policies do not pay those medical bills directly. They usually pay out a lump payment to the injured party, which the injured party can then use to help cover the cost of some of those medical bills.

Lost Wages

Serious injuries can have a detrimental impact on the victim’s ability to work, whether he suffers a traumatic brain injury that prevents him from dealing well with customers in a customer service position or broken bones that prevent him from engaging in heavy lifting and other needed activities in a warehouse.

When the victim cannot go back to work, he may lose his source of income for the duration of his recovery. The longer that recovery takes, the greater the weight of those financial losses may grow. Many liability policies will include compensation for some of the wages the victim lost due to the accident.

General Damages

General damages, unlike special damages, often do not have a direct financial calculation. Many of the losses experienced by victims of serious accidents do not include direct financial values.

For example, you may find it very difficult to quantify the value of the pain you have experienced after a serious accident or the value of the loss of enjoyment of life you sustained due to your injuries. Those general damages, however, may have a substantial impact on your life, from the activities you enjoy to the people you interact with.

Most liability policies will include some method of assigning compensation to damages that do not have a strict financial value, including pain and suffering, emotional anguish, or loss of relationships related to the incident.

How Do You Determine Liability After A Serious Incident?

To file for compensation through a liability-based insurance policy, you may need to establish that the policyholder bears liability for your accident and your injuries. How do you determine liability after a serious incident?

In some cases, you may have an accident report, including a police report, that clearly establishes who bears liability for the accident based on information and evidence available at the scene. For example, if you suffer serious injury in a car accident with a drunk driver, you may have a police report that states that the driver’s negligent action caused the accident, and even that the driver’s blood alcohol content shows a high level of inebriation.

If you suffered injuries in a slip and fall accident, you may have a report from the scene of the accident that shows the liable party’s actions and how they led to your injuries: failure to clean up a spill promptly, for example.

To determine liability after a serious accident, both lawyers and insurance companies look at several key questions.

Who bore a duty of care to the victim at the time of the incident?

A duty of care can incorporate a variety of factors. In general, a duty of care establishes that the party that caused the accident had a duty to protect the injured party in some way.

All drivers on the road, for example, bear a duty of care to all others on the road. That duty of care includes following the rules of the road and taking steps to avoid an accident wherever possible. Drivers might violate their duty of care to others that share the road with them by driving while intoxicated, growing distracted behind the wheel, or ignoring the rules of the road, including speeding.

Likewise, most property owners bear a duty of care to anyone who lawfully visits that property. Both public and property owners need to maintain their properties in such a way that they can provide a safe experience for visitors to that site. When they cannot reasonably maintain the property in a way that does not present a risk, property owners may need to establish the potential risk that visitors to that site may face.

For example, a property owner in the middle of a major construction project might need to post signs warning commercial visitors to that site about the risk, or a private property owner might need to warn visitors about an open hole in the kitchen floor, the hazard of stepping on nails, or missing handrails along long flights of stairs.

How did the person or entity that caused the accident violate that duty of care?

The violation of the duty of care can occur in several ways. Generally, personal injury claims involve a party that negligently failed to adhere to its responsibilities to another person.

Suppose, for example, that a construction worker needed to perform electrical work in a store after hours. The construction company, and therefore the worker, knows that the store continues to operate normally during regular business hours, since the construction takes place after hours and the construction remains far enough away from the regular flow of business during work hours. As a result, the construction worker knows that any electrical hazard needs to be covered and kept away from guests who might move into the area.

However, the electrical worker might fail to properly close up the wall or seal off electricity after finishing his shift. He might forget to warn the store owner that he must leave electricity to a specific panel or area turned off, or he might simply leave live electrical wires on the site. If someone touches those wires, causing a serious shock and immense injury like electrical burns, the construction worker may bear liability for those actions.

In a car accident, generally, violation of the duty of care occurs through reckless or unsafe driving practices. The driver may become distracted, ignore the rules of the road, or engage in an act of road rage. Those reckless behaviors can result in serious injury to everyone around that driver, and the driver may bear liability for those dangerous actions.

How did that act of negligence lead to the victim’s injuries?

To establish grounds for a personal injury claim, your lawyer will need to show that the liable party’s negligence directly caused or contributed to your injuries.

Take a car accident claim, for example. Every driver on the road bears a duty of care to every other driver, and a driver who commits a negligent act that results in an accident usually bears liability for the result of those careless decisions.

However, not every driver’s actions contributed to the accident. Not only that, even drivers engaging in negligent behavior behind the wheel might not have caused an accident. While they may face civil penalties, including a ticket, they may not bear liability to the injured party directly if they did not contribute to the accident.

Imagine that you look over while driving down the highway and see another driver texting. He swerves a little out of his lane, but you manage to avoid him. Moments later, the driver to your other side swerves into your vehicle, resulting in a sideswipe collision.

While the driver that sideswiped you does bear liability for the accident, the distracted driver that passed you likely does not. In fact, that distracted driver may have traveled well down the road before your accident even occurs.

If you see a hazard and can avoid it, which will result in no injury, you also may not have grounds to pursue compensation through a liability insurance policy. Perhaps you visited a beachfront property with a set of stairs running down to the beach. After a look over the property, you may have discovered that the stairs had clear signs of wear, and you chose not to go down them.

During a later rainstorm, the stairs broke when a stick fell on them. While the damage might display a general lack of maintenance on the property, it likely does not leave you with grounds for a personal injury claim against the property owner or manager, since you did not suffer any ill effects other than a minor inconvenience at having to find another way to get to the beach.

What direct damages did you suffer as a result of the incident?

To claim compensation through a liability insurance policy, you will need to establish that you suffered some direct damage because of the negligent entity’s actions. Some damages from a claim may not have a tangible financial value: emotional distress, for example, might prove very difficult to quantify. To seek compensation for your losses, however, you will need to show that you suffered damages as a direct result of that incident.

While walking on a sidewalk in front of a local business, you might slip due to rough, poorly maintained concrete. Your foot skids. You might even hit the ground, your dignity in shreds. However, you get back to your feet and discover that you suffered no injuries: not even scrapes on your palms.

As a result, you may not have grounds for a claim, despite the clear negligence and the fact that the lack of maintenance did cause an incident. On the other hand, if you suffer injuries in that fall, you may have grounds to claim compensation.

If you suffer serious injury, an experienced Orlando car accident lawyer can help go over potential liability in your accident and give you a better idea of what to expect as you move forward with a claim.