CCA CCA Liability and Subrogation 2 — Questions and Answers
Question 1: What is the 'made whole' doctrine in subrogation?
- The insured must be fully compensated before the insurer can recover subrogation proceeds (Correct answer)
- The insurer recovers first and then pays the remainder to the insured
- Subrogation applies only when the third party is fully insured
- The insurer must prove negligence before asserting subrogation
Correct answer: The insured must be fully compensated before the insurer can recover subrogation proceeds
The made whole doctrine prevents the insurer from recovering subrogation proceeds until the insured has been fully indemnified for their total loss.
Question 2: Which party bears the burden of proof in most civil liability claims in the US?
- The defendant, beyond a reasonable doubt
- The plaintiff, by a preponderance of the evidence (Correct answer)
- The insurer, by clear and convincing evidence
- The court, using judicial notice
Correct answer: The plaintiff, by a preponderance of the evidence
Civil liability claims require the plaintiff to prove their case by a preponderance of the evidence, meaning more likely true than not.
Question 3: What does 'indemnification' mean in a liability context?
- Transferring the risk of loss to a third party before a claim occurs
- Restoring the injured party to their pre-loss financial position (Correct answer)
- Assigning all liability to the insurer permanently
- Waiving the right to file future claims
Correct answer: Restoring the injured party to their pre-loss financial position
Indemnification is the principle of making the injured party whole again financially, without profit or penalty.
Question 4: An employer is typically vicariously liable for employee negligence when the employee is:
- Commuting to work
- Acting within the scope of employment (Correct answer)
- Performing personal errands during lunch
- Off duty and away from company premises
Correct answer: Acting within the scope of employment
Employers are generally held vicariously liable only when the employee's negligent act occurs within the scope of their employment duties.
Question 5: What is a 'letter of protection' sometimes used in liability claims?
- A document shielding the insurer from bad faith claims
- An agreement where a medical provider defers billing until a settlement (Correct answer)
- A court order preventing disclosure of claim files
- A waiver signed by the claimant releasing future damages
Correct answer: An agreement where a medical provider defers billing until a settlement
A letter of protection is an agreement between a claimant's attorney and a healthcare provider to delay billing until the personal injury case is resolved.
Question 6: Which type of damages are intended to punish egregious defendant conduct?
- Compensatory damages
- Nominal damages
- Punitive damages (Correct answer)
- Special damages
Correct answer: Punitive damages
Punitive damages go beyond compensating the plaintiff and are designed to punish willful, malicious, or grossly negligent conduct.
CCA CCA Liability and Subrogation 2
What is the 'made whole' doctrine in subrogation?