Insurance Law Study PDF

INSURANCE LAW INSURANCE LAW Broker - An insurance broker is a licensed professional who acts as an intermediary between clients (individuals or businesses) and insurance companies Contra Proferentem rule if a term in a contract (such as an insurance policy) can be interp...

INSURANCE LAW INSURANCE LAW Broker - An insurance broker is a licensed professional who acts as an intermediary between clients (individuals or businesses) and insurance companies Contra Proferentem rule if a term in a contract (such as an insurance policy) can be interpreted in more than one way, the court will resolve the ambiguity against the party who wrote the contract — typically the insurer in insurance law Property insurance - provides financial protection against risks or damage to physical assets, such as buildings, personal property, or business equipment. It typically covers losses due to events like fire, theft, vandalism, or natural disasters. co-insurance clause, requiring the insured either to bear some risk of loss themselves (a ‘deductible’). if you have more than one policy on the same property, you can never collect more than the loss. The insurers are entitled to contribute to compensating the insured - will each pay only a portion of the loss ("Contribution"). Business Interruption Insurance -Insurance to cover lost profits and added expenses incurred to bring a business back into production from a halt top production (fire natural disaster, insurance claim) Life and Health Insurance - is a contract where the insurer promises to pay a designated beneficiary a sum of money (the death benefit) upon the death of the insured. In exchange, the insured pays regular premiums. whose life you can insure (or who can insure your life); Limited to spouses (common law or married), children, grandchildren, dependants (does not include siblings unless dependant). Insurable interest requirement mandates that the policyholder must have a financial, emotional, or other beneficial relationship with the insured person or property. This requirement ensures that the policyholder benefits from the continued existence of the insured and prevents moral hazard or fraudulent claims. Liability Insurance - A fidelity bond (also called employee dishonesty insurance) is a type of insurance that protects businesses against losses caused by fraudulent or dishonest acts committed by employees. These acts may include theft, embezzlement, forgery, or other forms of financial dishonesty. a surety bond is a type of contract where a third party (the surety) guarantees the performance or obligations of one party (the principal) to another party (the obligee). If the principal fails to meet the terms of the contract or obligations, the surety ensures that the obligee will be compensated. CONTRACT LAW Elements of a contract Consensus - Offer -Clear proposal to enter a contract 3 things an offer needs 1 Certain (unambiguous). 2 Complete (all significant terms covered). 3 Communicated (orally, in writing, or by conduct) Acceptance- Unqualified agreement to the offer  WHEN: The contract is formed when the offer is accepted (when received by the offeror) WHERE: General rule is that a contract is formed at the place where the acceptance is received by the offeror. Three things needed for acceptance 1. Positive Form (not silence) Acceptance must be clear and positive, not vague or implied. Silence is generally not considered acceptance 2. Unconditional & unequivocal without conditions. The offeree must accept the terms of the offer as they are, without changing or adding any new conditions. 3. Communicated to the offeror, unless conduct signifies acceptance. Acceptance must be communicated to the offeror to be valid. This means the offeror must be informed of the acceptance Consideration- Value exchanged between parties Capacity- Legal ability to enter into a contract Legality of Purpose- The contract must have a lawful objective Certainty of Terms -Clear, specific terms to avoid ambiguity Contract - a voluntary exchange of promises, creating obligations that, if defaulted on, can be enforced or remedied by the Courts A contract is an exchange of promises: offer and acceptance of the offer. the offer is a tentative promise (dependant upon acceptance) acceptance also consists of a promise - to do the act requested by the offeror. enforceable contract - is a legally valid agreement that can be upheld in a court of law. If one party fails to fulfill their obligations, the other party can seek legal remedies, such as damages or specific performance. Standard Form Agreement -type of contract where the terms are set by one party (usually the offeror), and the other party (the offeree) can only accept or reject the agreement without negotiation. These agreements are typically used for mass-market contracts where the same terms are offered to all consumers or clients. Capacity - Diminished capacity refers to a person's reduced ability to understand the nature and consequences of their actions, often due to mental illness, intoxication, or other factors that affect their cognitive abilities. In the context of contract law, it may affect the enforceability of a contract if one party lacks the mental capacity to understand the terms of the agreement. Legality- the requirement that the subject matter of a contract must not involve illegal activities or be against public policy for the contract to be enforceable. A contract is void and unenforceable if its terms involve illegal actions or purposes. Intention - Intention in contract law refers to the mutual intention of the parties to create a legally binding agreement. For a contract to be valid and enforceable, both parties must intend to be legally obligated by the terms of the agreement. Without this intention to create legal relations, the agreement will not be considered a valid contract, even if all other elements (like offer, acceptance, and consideration) are present. If no stated intention, Courts apply a reasonable person test -Ask whether the outward conduct and relationship of the parties would lead a reasonable observer to conclude that there was intent to be bound. requirement of writing - in contract law refers to the need for certain types of contracts to be in written form in order to be enforceable. This requirement exists to provide clear evidence of the agreement and to ensure that the parties fully understand their obligations. In some cases, the law mandates that a contract be in writing, while in other cases, it is optional but can help avoid disputes. Statute of Frauds is a legal concept that requires certain types of contracts to be in writing in order to be enforceable. The purpose of the statute is to prevent fraud and misunderstandings by ensuring that key contracts are documented and clear, providing evidence of the parties' intentions and the terms of the agreement These include Contracts for longer than one year (but contracts for indefinite periods are enforceable). Contracts for title to land (but not for the building of a house, or leases for less than three years). Guarantees (see the Guarantees Acknowledgment Act). Promises made in consideration of marriage. Promise of an executor to pay a debt of the deceased out of his own pocket. Contracts for the sale of goods where the value of the goods exceeds $50. (Sale of Goods Act ) INTENTIONAL TORTS Tort - civil wrong or wrongful act (other than a breach of contract) that causes harm or injury to another person, and for which the injured party can seek compensation through a lawsuit. The main purpose of tort law is to provide remedies to individuals who suffer harm caused by the wrongful conduct of others and to deter such conduct in the future. Types of harm - personal injury, property damage, emotional distress, or financial loss. Tort cases are civil disputes, meaning they are between private parties. The injured party (plaintiff) sues the party who caused harm (defendant). tortfeasor - is the wrongdoer in a tort case. A tort requires these 3 things Fault - wrongful act or behavior of the defendant (the tortfeasor) that causes harm to the plaintiff. The fault can be based on intentional wrongdoing, negligence, or strict liability. Causation - direct link between the defendant’s wrongful act and the harm suffered by the plaintiff. The defendant's action (or inaction) must have caused or significantly contributed to the injury, could be removed if the injury was too remote to be foreseeable Compensable injury - plaintiff must have suffered a recognizable harm or loss that can be compensated by the courts. This injury can be physical, emotional, or financial. Trespass to the Person is a broad category of intentional torts that involves interference with a person's right to personal security and freedom from harm. In Canada, trespass to the person typically includes assault, battery, and false imprisonment. Battery: deliberate physical contact without consent Defences - consent, or self defence Assault deliberate threat of contact (no actual contact required) real fear created of unwanted physical contact Conversion - intentional tort that involves the unauthorized taking, use, or control of someone else's personal property in a way that denies the rightful owner possession or use of it. Unlike trespass to chattels, which involves minor interference with property, conversion is more serious and generally refers to actions where the defendant treats the property as their own, effectively depriving the owner of their rights. - basically stealing Trespass to Land - unauthorized entry onto someone else’s land or property. The key aspect of this tort is the invasion of land without the owner's consent or lawful justification. Trespass to land can occur even if no damage is caused to the land, as the mere act of entering or interfering with the land is sufficient to establish the tort. Private Nuisance - unlawful interference with a person’s use or enjoyment of their land or property. It is a type of tort where one party's actions or omissions cause harm, discomfort, or inconvenience to another’s property rights, leading to a claim for damages or an injunction. Unlike public nuisance, which affects a broader group of people, private nuisance involves interference with an individual’s rights or enjoyment of their land, usually due to a particular activity or condition on neighboring property. False imprisonment - False: unlawful or without authority Imprisonment: holding someone, deliberately or intentionally, against their will Even “staying put” may suffice – if submitting to one in authority. ie. plaintiff felt compelled to stay Includes false arrest – unlawfully restraining someone. Breach of privacy is not recognized as a tort by common law. UNINTENTIONAL TORTS Negligence - a failure to exercise reasonable care that results in harm or injury to another person or their property. Four Key Ingredients – A, B, C, D A Duty of care exists -The defendant owed a legal duty to the plaintiff. This can arise from a relationship or from general principles of law (e.g., the duty to drive safely when on the road). Misfeasance - wrongdoing Nonfeasance - failure to act Courts use the reasonable foreseeability test: Is it reasonably foreseeable that the defendant’s conduct is likely to cause injury? If so, then a duty of care is owed. Breach of that duty Courts use a reasonable person test: Did the Defendant’s conduct fall below the standard of care of a reasonable person in the same circumstances? (objective standard) - as risk increases, so does standard of care in experience does not matter in this case Parents are only liable for their children where supervision is required Causation – the defendant’s conduct caused the injury - one is responsible for damage one actuality causes Physical causation test - was the injury have occurred but for the defendant's conduct? Remoteness test - was the injury too remote to have been foreseen? -if unforeseen, the defendant is not liable Thin skull rule - law that holds a defendant fully liable for the plaintiff's injuries, even if the plaintiff's condition makes them more vulnerable to injury than a normal person. Damages – victim suffered an injury or loss -must be an actual loss, or injury suffered by plaintiff -damage could include comp for future loss of earnings Heitsman v. Canadian Premier Life Insurance Co., the insured, Mrs. Heitsman, made a claim for benefits under a life insurance policy after her husband’s death. The insurance company, Canadian Premier Life, denied the claim, citing an exclusion clause in the policy. The clause was ambiguous, particularly regarding how it applied to the specific circumstances of Mr. Heitsman’s death. Insurable interest refers to the financial or emotional stake a person or entity must have in the subject matter of an insurance policy. In order to purchase insurance, the policyholder must prove that they would suffer a financial loss if the insured event occurs. Without insurable interest, an insurance policy would be invalid. Utmost good faith - requires both parties involved in an insurance contract—the insurer and the insured—to act with the highest level of honesty and transparency. Both parties must disclose all relevant information truthfully and fully, even if not specifically asked. This ensures that both the insurer and the insured are entering into the contract based on accurate and complete information. Consequences of nondisclosure or false statements Failure to disclose material information may render the contract voidable by the insurer. Misrepresentation -when the insured provides false, incorrect, or incomplete information during the application process or when renewing a policy. The misrepresented information can affect the insurer's decision to provide coverage or the terms under which it is offered. Subrogation is a term describing a legal right held by most insurance carriers to legally pursue a third party that caused an insurance loss to the insured. salvage refers to the remaining value of damaged property or goods after a loss occurs Forfeiture rule in insurance law is a principle that states an insured party may lose their right to a claim or policy benefits if they commit certain acts that breach the terms of the insurance contract or are considered unlawful. Similarly, the insured is not permitted to profit from his willful misconduct. The insured cannot collect if he/she deliberately causes the loss. CONTRACT LAW 4 ways to terminate an offer 1) Lapse – An offer expires automatically after a specified period or after a reasonable time if no time limit is stated. 2) Revocation (withdrawal) –An offeror can withdraw (revoke) the offer at any time before it is accepted, as long as the revocation is communicated to the offeree. 3) Rejection 4) Counter-offer – made by offeree to offeror General Rule (regarding acceptance of offer) -Contract is formed when and where acceptance is received by offeror Post-Box Rule (exception to the General Rule) -an acceptance is effective once it is sent by mail, not when it is received by the offeror. This rule applies when the mail is an appropriate method of communication between the parties. Freedom of contract is a fundamental principle in contract law that allows individuals and businesses to enter into agreements of their choosing with minimal government interference. This principle means that parties are generally free to negotiate terms, set conditions, and decide on the nature of their agreements, as long as the contract is lawful. Court will not rewrite the agreement so that it is FAIR. Forms of a contract Bilateral - both parties make mutual promises to each other. Each party is both a promisor and a promisee, and both parties are obligated to perform certain actions or fulfill certain duties. Unilateral - only one party makes a promise in exchange for the performance of an act by the other party. In other words, one party is obligated to perform something, but the other party is only required to act (perform the task) to trigger the promise. Consideration - refers to the value that one party offers in exchange for the promise or act of the other party, which doesn't have to be money; it can also involve a change in behavior or a promise to do something. This value must be recognized as meaningful or of some worth to both parties, and it should be ascertainable or quantifiable. However, the adequacy of the consideration (whether the exchange is fair or equal) is irrelevant to its validity in a contract. No contract if Past consideration -If the consideration for the contract was provided before the agreement was made, it doesn't count as valid consideration (e.g., promises based on actions already performed). Illegal consideration - If the consideration involves something illegal or against public policy (e.g., a promise to commit a crime), the contract is void. Impossible consideration - If the consideration requires something impossible to perform (e.g., a promise to do something physically or legally unattainable), the contract cannot be enforced. Gratuitous promises - A promise made out of love or friendship, without any exchange of value, is not enforceable as it lacks consideration. INTENTIONAL TORTS Damages Special - quantifiable, out-of-pocket losses that the injured party suffers due to the wrongful act. General - non-quantifiable losses that are difficult to calculate but still significantly impact the injured party.(non-economic). Subjective in nature and based on the plaintiff’s experience. Focus on emotional and physical suffering that results from the injury. ex:If someone is permanently injured and can no longer play their favorite sport, they may receive compensation for their loss of enjoyment of life. Punitive - Punitive damages are awarded to punish the defendant for egregious conduct and to deter similar behavior in the future. Court is balancing desire to compensate innocent victims, but also avoiding being too harsh that everyone is scared of being sued Ex: (upper limit of 350k in canada for payment from guilty) Vicarious liability - legal doctrine that holds one party responsible for the actions of another party, typically in a master-servant relationship (or employer-employee relationship). The basic principle is that an employer can be held liable for the wrongful acts of its employees when those acts are committed within the scope of employment. Enables the plaintiff to recover from the party who financially benefits from the work of the employee. The employer may still be able to turn to its employee (sue) and recover its loss. trespass to Chattels - intentional tort that involves the unlawful interference with another person's personal property (referred to as chattels). Chattels are movable property, such as goods, cars, or electronics. Unlike trespass to land, which deals with interference on someone’s land, trespass to chattels deals with property that is not land or real estate. Detinue - Wrongfully refuses to return a chattel (personal property) that they have taken or possessed, despite the owner’s request for its return. It is similar to conversion, but instead of depriving the owner of the property permanently, detinue involves the unlawful withholding of the property after the owner has made a demand for its return. Occupier’s Liability - Occupier’s Liability refers to the legal responsibility of an occupier of land to ensure that their premises are reasonably safe for visitors and others who may enter. The occupier may be an owner, tenant, or anyone with control over the property. This liability is rooted in the premise that people have a duty to maintain their property and protect others from harm, particularly if they invite or allow people onto their land. Minimal duty is owed to trespassers (no traps) more duty is held if you have minors entering Ways to reduce ones potential liability - have the visitor voluntarily assume risk -sign a waver -put up a sign -these will help but not entirely protect you Strict liability - a party responsible for its actions or omissions, regardless of fault, intent, or negligence. Under strict liability, a party can be held liable for harm or damage caused by certain activities, even if they took all possible precautions to avoid harm. The focus is on the inherent danger of an activity, rather than the party's conduct or intent. Defamation - injury to one's reputation - in Alberta: includes libel (written) and slander (spoken) 1. false statement 2. published…communicated to a third party 3. detrimental…derogatory to one’s reputation Defences - truth/justification - Absolute privilege - some cases the person is protected to not be liable for defamation, like a court setting or legislative hearing something like that Qualified privilege - statements made out of a sense of duty -statements made to others who have a right to know -if without malice or knowledge of falsehood Fair Comment - often used by the press comments made regarding public figures without malice or unjust motive Statuettes of privacy protection Provincial - Freedom of Information and Protection of Privacy Act (FOIPPA) - This act governs how public bodies in Alberta (such as provincial ministries, municipalities, and educational institutions) collect, use, and disclose personal information. It also ensures the public's right to access government-held information while protecting personal privacy. Personal Information Protection Act (PIPA) - Alberta's PIPA is a provincial law that governs the collection, use, and disclosure of personal information by private sector organizations in Alberta. It applies to businesses and not-for-profit organizations and sets out the rules for how personal data must be handled, ensuring individuals' privacy rights are protected. Federal - Privacy Act - This federal statute applies to how the Canadian government collects, uses, and discloses personal information. It governs federal government departments and agencies' handling of personal data, ensuring that individuals' privacy is respected while they interact with federal services. Personal Information Protection and Electronic Documents Act (PIPEDA) - PIPEDA is a federal law that governs how private-sector organizations across Canada collect, use, and disclose personal information in the course of commercial activities. It applies to businesses engaged in commercial activities and sets out the obligations for organizations to safeguard personal data. UNINTENTIONAL TORTS Defences of negligence - Contributory negligence - plaintiff contributed to his own injury (partially caused or did something that made it worse) -liability is all of nothing Professional liability- refers to the legal responsibility of professionals to provide services to a standard expected within their field. If they fail to meet this standard and cause harm or loss to a client, they can be held liable for negligence or malpractice. negligent Misrepresentation occurs when someone provides false or misleading information, believing it to be true, but fails to take reasonable care in ensuring its accuracy. This typically arises in professional contexts where one party relies on the misrepresentation to their detriment. To establish negligent misrepresentation, five elements must be proven: 1. A duty of care exists between the parties. 2. The statement made was false, inaccurate, or  misleading. 3. The person making the statement acted negligently. 4. The person receiving the statement relied on it reasonably. 5. The reliance caused damage or loss. This tort holds professionals accountable for careless advice or information that leads to harm.