Risk Management Final Cumulative

Risk Management / Pittsburgh Institute of Mortuary Science / Final Date: 12/18/23

Law

Law

Governmental rule that...

-Prescribes conduct

-Carries a penalty for violation

Constitution

Created US government

Highest source of law in our government

Worlds longest surviving written charter of government

Bill of Rights

The first ten amendments to the Constitution, published together

The constitution assigned Congress the responsibility of...

Make laws necessary for executing these powers

-Organizing the executive and judicial branches

-Declaring war, "Authorizing the use of military force"

-Raising tax revenue

Statutes

Law which are enacted by legislative bodies

Ordinances

Law enacted by a local unit of government

Three branches of government

Legislative, Executive, Judicial

Legislative Branch (Congress)

Makes the laws

Checks and balances

Two sub-divisions: Senate, House of Representatives

Senate

Sub-division of Congress, two representatives per state

House of Representatives

The lower house of Congress, consisting of a different number of representatives from each state, depending on population, 435 total

Executive Branch

President, Vice President, and Cabinet

Enforce/uphold the law

Veto power

Judicial Branch

Supreme Court

Interpret the law

Common law

The body of law deriving from judicial decisions, rather than from statues or constitutions

"Stare Decisis"

The decision of higher court serves as a guide or precedent

Past interpretation is applied to future cases

Levels of Government

Federal, State, Local

Federal Government

Legislative, executive, judicial

State Government

State senate and house, state governor, state supreme court

Local Goverment

City council, mayor, local courts

Civil law

Body of law concerned with private/purely personal rights

Tort Law, Contract Law, Business Law, Property Law

Tort law

Private or civil wrongs

Damages against person or their property (Emotional or physical)

Criminal Law

Laws dealing with the crimes and the punishment of wrongdoers

Government (Plaintiff) for society vs Individual (Defendant)

Plaintiff

The party who initiates a civil action

Defendant

The party against whom legal action is brought

Jurisdiction

The power/authority of a court to hear cases

Geography, federal vs constitutional

Appeal

Request to a higher court to review a lower court's decision

Trial Court

Court that hears case first

General—any subject matter (not federal)

Includes criminal and civil

Judge "finds" conclusion

Settlements may occur

Appellate Court

Courts hearing cases appealed from a lower court, Appellant vs Appellee

3 Types of torts

Intentional

Strict liability

Negligence

Intentional Tort

Wrongful acts done on purpose on persons, property, and/or economically

5 checkboxes for Negligence Tort

1) Duty (Defendant owes a duty & a standard of care to foreseeable victims for foreseeable harm)

2) Breach of duty

3) Actual Cause-- “But for” (If the defendant actually caused the negligence)

4) Proximate Cause (Scope & foreseeability)

5) Damages

Due Diligence

Level of attention (establishes standard of care) reasonably expected from, and ordinarily exercised, by a person who seeks to satisfy legal requirement

Level of care depends on status of visitor

Trespasser vs. Invitee

Trespasser

One who intentionally and without consent or privilege enters another’s property

Invitee

One who has been invited on the property by the landowner

Persons coming to a funeral home for the purpose of attending funerals, viewing remains, or engaging the funeral director's services

3 Types of drivers

Volunteer driver

Agent driver

Livery

Volunteer driver

Those drivers not under the control of the funeral director (guest), not an agent

No control = no liability

Agent driver

Those drivers under the directors and control of the funeral establishment, which is liable for the driver’s negligent action

Control = Liability

Livery

Automotive equipment made available for hire (rented out hearses) 

Liable if FD holds out cars and drivers as their own (If funeral home acts as if they were their employee)

If funeral home uses their own employee, counts as agent

Risk

A probability/threat of damage, injury, liability, loss, or any other negative occurrence that is caused by external or internal vulnerabilities

Operational risk

Loss of assets, and potential earnings of a firm

• Property risk

• Liability (Tort)

• Personnel

• Financial

Market risk

Uncertainty associated with an investment decision

Insurance

The equitable transfer of the risk of a loss, from one entity to another

Primarily used to hedge (lessen chances) against the risk of contingent, uncertain loss

Underwriter in insurance

Insurance company

Premium

Monthly payments

Deductible

Amount you need to pay until insurance covers

Replacement value

How much will it cost to fix

Cash value

What is the property worth

Casualty insurance

Provides monetary benefits to a business that has experienced an unforeseen peril

Business interruption insurance

Protects companies during the period necessary to restore property damages by an insured peril

Coverage pays for lost income and other expenses related to recovery

Cyber insurance

Protects against cyber attacks

Life insurance

Premium is based off face value (How much gets paid out when _____ dies)

Term life policy

Contract whereby insurer assumes risk of death of insured for a specific time with no cash surrender value

If you die between two specific dates, insurance pays out (Not guaranteed payout)

Whole life policy

Insurance that covers an insured for life and accumulated cash surrender

If you die after the first payment, insurance paid out (Guaranteed payout)

Universal life policy

An insurance product combining features of both whole life and term life policies

Take an existing term life policy → whole life policy

2 Umbrella policies

CGL: Commercial General Liability insurance (Premises, operations, product, and completed operations liability)

Business owner policy and package policy  (Property and CGL)

Workers’ compensation insurance

Coverage that provides benefits to employees injured at work

Disability insurance

Insurance policy that provides income to individuals who can no longer work because of a disability

Key-person life insurance

Life insurance that protects a firm against losses due to the death of a key employee

What constitutes intent?

Voluntary act

Willful

Desired result (Transferred intent)

Actor knows with substantial certainty that the result will occur 

Intent to carry out elements of the tort

Tortfeasor

Actor who caused harm

4 Types of personal torts

Battery

Assault

False imprisonment

Intentional infliction of emotional distress

Battery (personal tort)

Intent

Harmful (physiological) or offensive (psychological) contact

Person or “near person” (Object on body)

Transferred intent

Assault (personal tort)

Intent

Cause apprehension (perception) of harmful or offensive contact

Imminent

Transferred intent

False imprisonment (personal tort)

Intent to confine someone

Conscious

Bounded area for any amount of time with no reasonable escape

-Physical barrier

-Force or threat

-Failure to act

-False arrest

Intentional infliction of emotional distress (personal tort)

Intent/recklessness

Extreme or outrageous conduct

Causes the victim to severe mental distress

Transferred intent

Intended to do one thing, actually does it to someone else

Ex: Missing punch and hitting person behind them

2 Types of property torts

Trespass to chattel
Conversion

Trespass to chattel (property tort)

Intent

Personal property

Bad faith is not required

Interference with the right of possession

-Damage

-Dispossession

-Deprivation — substantial time

-Failure to remove obstruction

Chattel

A catch-all category of property associated with movable goods

Conversion (property tort)

Trespass to chattel + destruction

Bad faith is not required

Needs full replacement

-Irreparable damage, derivation, or disposition

Fraudulent misrepresentation (economic tort)

Material misrepresentation

Scienter 

Defendant intended to induce reliance upon the misrepresentation (Or should know, would induce reliance)

Misrepresentation caused reliance & damages

Scienter 

Defendant knew misrepresentation was false

Professional negligence tort

Held to professional level of standard of care (SOC)

Typically applied to professional occupations (Doctor, lawyer, architect, accountant, engineer)

Custom

Penalty - License and monetary

Custom

SOC exercised by a reasonable professional in that profession

Custom serves as evidence to determine breach of duty

Expert witnesses

Strict liability tort

A person will be held liable

For injury or loss for certain acts (Even if they exercised all possible care to prevent it)

Involves an inherently dangerous situation

“Abnormally dangerous activity” (Ownership of animals, explosives, chemicals)

Manufacturer, wholesaler, or retailer liable without proof of negligence

Focus - condition of product rather than duty of care

-Product design

-Product defects

-Warnings — Call attention to danger

-Instructions — Describe procedures for effective use

Contract

A legally enforceable agreement

Formation

The way contracts are formed

Offer

A proposal to make a contact

A promise to do or refrain from doing some specified thing in the future conditioned on the other party’s acceptance

Consideration of offer

Bargained for exchanged that both parties have, and a legal detriment manifested in a promise, with no pre-existing duty

-Bargained for exchange

-Legal sufficiency

-Determinable: not illusory

Counteroffer

A change to an original offer that in effect, rejects that offer and becomes a new offer

Offeror

The party who initiated or makes an offer

Offeree

The party to whom an offer is made

The 3 C’s of offers

Commitment/intent

Clear and definite terms

Communicated to offeree

Express contract

One in which the parties express their intentions, either verbally or in writing, at the time of the agreement

Requires some record with definiteness and signature 

Formed orally or written

Statute of frauds (SOF)

Law requiring certain contracts be in writing to be enforceable 

Assuming that a contract is within the SOF, it is enforceable

Types of contract that must be in writing

Sale of land, goods over $500, guaranteed over 1 year, promises regarding marriage, surety (protection from default), executors/fiduciary (wills)

Fiduciary

A person in relationship of trust and confidence, must always act in the best interest of the relationship and trust

Implied contract

One in which the terms of the contact are implied by acts or conduct of the parties

Quasi contract

A contract created or implied by law to prevent unjust enrichment

Performance of contract

The way it’s carried out

Executive contract

A contract in which the terms have been fulfilled/completed

Executory contract

A contract in which the terms have not been completely executed or fulfilled (not complete)

Enforceability of contracts

Can you be held liable?

Must have valid formation and free of defenses

Valid formation

Valid formation must have mutual assent (offer & acceptance) and consideration or promissory estoppel

Valid contract

A contract which is legally enforceable

Void contract

An agreement of no legal effect, never will become enforceable

Unenforceable contract

An agreement which at the current time is not enforceable by law

Voidable contract

A contract which would be enforceable agreement, but due to circumstances may be set aside by one of the parties

Disaffirmance

Election to avoid voidable contract

Liability for necessaries

Items required for living at a reasonable standard