Risk Management Techniques and Legal Liabilities

Flashcards covering various key concepts related to risk management techniques, legal liabilities and insurance, and detailed definitions for terminology used in these contexts.

Loss Control

Activities aimed at reducing a firm’s expected loss.

Loss Prevention

A strategy that reduces the frequency of losses, such as warning labels or safety training.

Risk Transfer

Shifting responsibility for losses away from a firm to another third party, often through insurance or contracts.

Loss Financing

Finding ways to pay for losses when a firm cannot control or transfer them, either through external or internal means.

Common Law

A legal system based on prior court cases and judicial decisions, as opposed to statutory laws.

Negligence

A tort that requires the plaintiff to prove that they should be compensated due to the defendant's failure to exercise reasonable care.

Strict Liability

A legal standard holding a defendant liable for their actions regardless of negligence, typically in product liability cases.

Class Action Lawsuit

A legal action where a group of plaintiffs with common claims sue a defendant, increasing efficiency in addressing similar grievances.

Commonality

A prerequisite for class action certification, indicating that the claims share common questions of law or fact.

Workers Compensation

A compulsory insurance program providing benefits to workers injured on the job without the need for proof of negligence.

Assumption of Risk Defense

A legal defense where the defendant proves the plaintiff knowingly accepted the risks involved.

Duty of Care

The legal obligation to avoid causing harm to others, a foundational element in proving negligence.

Proximate Cause

A legal concept that establishes a direct link between the defendant's action and the plaintiff's injury.

Hold Harmless Agreement

A contractual provision where one party agrees not to hold the other liable for any loss or damage.

Limited Liability

A legal structure that protects owners of a corporation from being personally responsible for the business's debts.

Tort Law

The area of law dealing with civil wrongs and damages, excluding breaches of contract.

Contributory Negligence Defense

A defense in tort cases where the plaintiff's own negligence contributed to their injury, barring them from recovery.