Presentation on theme: "T ORT & INSURANCE WORKSHOP n North Carolina State University April 2002 David Drooz, Associate General Counsel Jim Semple, Director, Insurance & Risk."— Presentation transcript:
T ORT & INSURANCE WORKSHOP n North Carolina State University April 2002 David Drooz, Associate General Counsel Jim Semple, Director, Insurance & Risk Management N.C. State University
TORT & INSURANCE WORKSHOP n I. Practical info n II. What is a tort? n III. Liability – limits and defenses n IV. Insurance coverage
I.PRACTICAL INFO n WHEN THERE IS AN ACCIDENT, INJURY, OR DAMAGE: ä Get help ä Make record of what happened ä Report to supervisor ä Report to NCSU Insurance & Risk Management ä Report to Office of Legal Affairs
I.PRACTICAL INFO n Office of Insurance & Risk Management ä ä n Office of Legal Affairs ä ä
II.WHAT IS A TORT? n A WRONG OR INJURY TO ANOTHER, n APART FROM BREACH OF CONTRACT, n WHICH A COURT CAN REMEDY BY AWARDING DAMAGES
II.WHAT IS A TORT? n 1.DEFENDANT MUST OWE A DUTY OF CARE TO THE PLAINTIFF ä -- DUTY OF CARE IS IMPOSED BY LAW, NOT PRIVATE AGREEMENT ä -- DUTY OF CARE IS THE ESSENTIAL INQUIRY IN ANY TORT CASE
II.WHAT IS A TORT? n 2.DEFENDANT MUST HAVE BREACHED THAT DUTY n 3.THE BREACH OF DUTY MUST BE THE PROXIMATE CAUSE OF HARM TO PLAINTIFF n 4.PLAINTIFF MUST HAVE SUFFERED ACTUAL DAMAGES
II. CATEGORIES OF TORTS ä A. NEGLIGENCE ä B. GROSS NEGLIGENCE ä C. INTENTIONAL ä D. STRICT LIABILITY
II.NEGLIGENCE TORTS n FAILURE TO USE REASONABLE CARE ä measured by prudent person in similar circumstances n MOST MISTAKES AND ACCIDENTS ARE DUE TO “NEGLIGENCE”
II.NEGLIGENCE TORTS n Some university cases: ä Slip and fall ä Drowning ä Motor vehicles ä Negligent hiring ä Infliction of emotional distress ä Defamation
II.TORTS - CHILDREN n A child under 7 years of age is legally incapable of contributory negligence n Rebuttable presumption: child 7 to 14 years old is incapable of contributory negligence n Bottom line: Take extra care for safety of children
II.TORTS - PREMISES n For lawful visitors, you must make a reasonable effort to make premises safe. You are not an insurer of their safety. n In practical terms, you should “INSPECT & CORRECT” unsafe conditions where you can. If it’s not feasible to correct a danger, then give warning.
III. LIABILITY – LIMITS & DEFENSES n Tort Claim Act / sovereign immunity n Defense of State Employees Act n Workers’ Compensation n Contributory negligence n Assumption of risk n Liability waivers n Volunteer immunity n Public duty doctrine
III.SOVEREIGN IMMUNITY n Sovereign immunity = the State cannot be sued in tort without its consent n Only the General Assembly can give consent (it has done so in the Tort Claims Act) n Not a defense to federal claims (although 11 th Amendment immunity may be a defense)
III.TORT CLAIMS ACT n NC General Statute allows tort suits against the State - within limits: ä FOR ORDINARY NEGLIGENCE ä CAUSED BY STATE EMPLOYEE (OR AGENT) ä ACTING WITHIN SCOPE OF AUTHORIZED SERVICE
VOLUNTEERS are “agents" if a State agency exercises sufficient control over them “AGENT” is a legal term, not the same as Extension agents, who are employees INDEPENDENT CONTRACTORS are not “agents” III.TORT CLAIMS ACT
n $500,000 limit on State’s liability for all claims of injury and damage to any one person arising out of one occurrence n First $150,000 is paid by employing agency. Remainder comes from a fund in the Office of State Management & Budget (but we contribute to that fund).
III.TORT CLAIMS ACT n Amount paid by State is reduced by any commercial liability insurance the State agency has n Cannot insure everything n Receipts-funded units will have to pay the full amount up to $500,000 per injured party. NCSU has pooled a fund for them.
III. DEFENSE OF STATE EMPLOYEES n N.C. General Statutes et seq. n THE STATE MAY DEFEND EMPLOYEES AND AGENTS IN LAWSUITS BROUGHT AGAINST THEM PERSONALLY
III. DEFENSE OF STATE EMPLOYEES ä "AGENTS" DEFINED THE SAME AS FOR TORT CLAIMS ACT ä COVERS CIVIL AND CRIMINAL LIABILITY (NOT JUST TORTS) ä FOR ACTS/OMISSIONS IN THE SCOPE AND COURSE OF AUTHORIZED SERVICE
III. DEFENSE OF STATE EMPLOYEES ä DOES NOT COVER FRAUD, CORRUPTION, MALICE ä DEFENSE ONLY IF ATTORNEY GENERAL DECIDES IT’S IN BEST INTEREST OF THE STATE ä EMPLOYING AGENCY PAYS UP TO $150,000 IF EMPLOYEE/AGENT IS FOUND LIABLE; STATE PAYS NEXT INCREMENT UP TO $500,000
III. DEFENSE – WORKERS COMP n WORKERS’ COMPENSATION IS THE EXCLUSIVE REMEDY WHEN IT APPLIES ä Exception: harm caused by intentional injury or gross negligence may give rise to tort suit n APPLIES TO EMPLOYEES WHO HAVE ACCIDENTAL INJURY, A TRAUMATIC INCIDENT, OR OCCUPATIONAL DISEASE FROM WORK-RELATED CAUSES
III. DEFENSE - CONTRIBUTORY NEGLIGENCE n WHERE BOTH PARTIES WERE NEGLIGENT, NC LAW BARS TORT CLAIM n Remember the exception for children
III. DEFENSE - ASSUMPTION OF RISK n NO TORT LIABILITY IF THE PARTIES HAD A CONTRACTUAL RELATIONSHIP AND PLAINTIFF VOLUNTARILY ACCEPTED RISKS ä E.g., hit by ball in stadium n Will not apply if injured party did not understand the risks, lacked bargaining power, or for public policy reasons
III. DEFENSE - LIABILITY WAIVERS / RELEASES n A CONTRACT NOT TO SUE n Uses words like “HOLD HARMLESS,” “INDEMNIFY,” “RELEASE,” “WAIVE” n Courts often refuse to enforce liability waivers
III. LIABILITY WAIVERS n 1998 case of Fortson v. McClellan: ä plaintiff signed liability waiver for college course on motorcycle safety ä plaintiff was injured in the course due to motorcycle malfunction ä the court ruled: public interest in motorcycle safety is enough to invalidate the liability waiver
III. VOLUNTEER IMMUNITY n Executive Order No. 48 (1980) and NCAC n Qualified Immunity for Volunteers Act - G.S (not for motor vehicle negligence) n First Aid Immunity - G.S and n Hazardous Material Immunity - G.S n Car Accident Immunity - G.S (d)
IV. Insurance and Risk Management
IV. Risk Management Process n Identify Loss Exposures n Select Technique to Treat Exposures n Implement Technique n Monitor, Evaluate, and Modify Techniques
IV. Risk Management Techniques n Avoidance n Insurance n Contractual Transfer n Separation of Exposure Units n Loss Control/Safety
IV. INSURANCE COVERAGE n The State pays for ä Excess liability insurance ä Motor vehicle insurance ä miscellaneous other policies n You must pay for other coverage
IV. Purchasing Insurance n All departmental purchases of Property/ Casualty Insurance are arranged through NCSU-IRM n Any special purchase of liability insurance must be approved by the North Carolina Dept of Insurance n For general liability exposures, State agencies/ universities rely on the Tort Claims Act and its statutory limits of $ 500K per claimant /occurrence
IV. Employees Excess Liability Insurance Policy n Excess of the Defense of State Employees Act ($ 500K) n Only if Attorney General authorizes defense n Covers Employees and Volunteers in the course and scope of duty/service to the University n Coverage Limits of $ 11 million per person/occurrence
IV. EXCESS LIABILITY POLICY n EXCESS LIABILITY POLICY EXCLUSIONS INCLUDE: ä Employee claims covered by Workers Compensation, Unemployment compensation, or disability benefits law ä Pollution, asbestos, and other toxic, hazardous, and explosive materials
IV. EXCESS LIABILITY POLICY n EXCLUSIONS CONTINUED ä Nuclear materials and nuclear facilities ä Automobiles, planes, boats over 30 feet ä Medical malpractice ä Criminal acts ä One insured suing another (except Equal Protection claims) ä Sexual assault or battery
IV. INSURANCE COVERAGE n STATE MOTOR VEHICLE INSURANCE n Covers damages to OTHER PARTIES for accidents that: ä involve use of a state-owned vehicle ä driven by a state employee ä on official business
IV. INSURANCE COVERAGE n State Motor Vehicle insurance DOES NOT COVER ä agents or volunteers ä employees driving a non-state car ä But, NCSU may contribute up to $150,000 as provided in Defense of State Employees Act if personal insurance is exhausted.
IV. Motor Vehicle Liability Insurance n Required by Statute on self-propelled vehicles n Liability Limits of $ 500K per person per accident, $ 5 million aggregate in state n Collision/ Comprehensive Coverage for temporary leased vehicles less than 30 days+ No CDW at rental agency n Important Note- If driving personal vehicle on state/ University business, your personal auto insurance applies as primary coverage for liability, comprehensive and collision exposures
IV. Liability of Others to NC State n If a party damages University property, document facts of event n Report all accidents or malicious acts immediately to Police n If a result of construction project activity, notify Construction Management n Report such events to OLA and IRM for assistance if vendor-related
V. VEHICLE USE n State-owned passenger vehicles may be driven ONLY ä by state employees ä on official state business. n No side trips for personal purposes.
V. VEHICLE USE n Rules for passengers who are not state employees: ä No hitchhikers ä Driver may bring spouse, kids (no pets) ä Others may ride IF –(a) they have an interest in the purpose of the trip, and –(b) their presence is related to state business.
V. VEHICLE USE n DRIVER IS RESPONSIBLE FOR: n Traffic fines, n parking fines, n towing costs for improper parking, n safe-keeping of car.
V. VEHICLE USE n Federal employees: n Must first request federal vehicle. n If no federal vehicle is available, they may use state vehicle IF they are under contract to do state business
V. VEHICLE USE n Must report all accidents to the police (rule for use of state-owned vehicles) ä Dollar amount of damage does not matter.
MORE INFO ON THE WEB n The NCSU Legal Affairs web site has NC State policies and legal topics. n