CCA Liability and Subrogation Flashcards

In a third-party liability claim, who is the 'third party'?

Answer: The injured person making a claim against the insured

In a third-party claim, the injured claimant (not the insured) makes a demand against the insured's liability policy.

What is 'assumption of risk' as a defense in liability claims?

Answer: The plaintiff knowingly accepted the danger that led to their injury

Assumption of risk is a defense arguing that the plaintiff voluntarily encountered a known danger, potentially reducing or barring recovery.

What is the primary purpose of a reservation of rights letter?

Answer: To notify the insured that coverage may be limited while the insurer investigates

A reservation of rights letter allows the insurer to investigate and defend a claim while preserving its right to later deny coverage based on policy exclusions.

Which statute of limitations period typically applies to personal injury liability claims in most US states?

Answer: 2–3 years

Most US states set a 2 to 3 year statute of limitations for personal injury claims, though it varies by jurisdiction.

What is 'last clear chance' in negligence law?

Answer: A doctrine allowing a plaintiff to recover despite their own negligence if the defendant had a final opportunity to avoid the harm

Last clear chance allows a negligent plaintiff to recover if the defendant had the final opportunity to prevent the injury but failed to act.

An adjuster discovers that a third-party claimant's injuries were partly caused by a pre-existing condition. How should this affect the claim evaluation?

Answer: The insured is liable only for the aggravation or worsening of the pre-existing condition

Under the 'eggshell skull' rule, defendants are liable for the full extent of injuries, but compensation can be apportioned to reflect only the aggravation of pre-existing conditions.