FLF Strategy PDF

Vocabulary Words: Defination: When setting claim reserves, the initial reserve amount set by an adjuster can act as an anchor, shaping future assessmen...

Vocabulary Words: Defination: When setting claim reserves, the initial reserve amount set by an adjuster can act as an anchor, shaping future assessments and decisions about the value of a claim. If the initial reserve is set too low, it may lead to underestimating the claim’s total cost throughout the adjustment process, potentially resulting in insufficient funds to cover the final settlement. Conversely, a higher initial reserve can prepare the insurer for more significant payouts, ensuring adequate funds are allocated. Understanding "anchoring" helps in recognizing its impact on claim evaluations and the importance Anchoring (FLF Strategy) **Please see the term "Claims of carefully setting initial reserves to reflect a realistic assessment of potential costs. This awareness can improve accuracy in financial planning and Reserve" for more information** claims management. A legal principle in tort law that holds property owners liable for injuries to children who are attracted to and harmed by a hazardous object or condition on their property. Under this doctrine, property owners have a heightened duty of care to protect children from potentially dangerous conditions that might attract them, even if the children enter the property without permission (i.e., trespassing). The doctrine is based on the idea that children may not recognize certain dangers and may be drawn to objects or areas that pose risks, such as swimming pools, trampolines, or Attractive Nuisance Doctrine abandoned machinery. Examples: Swimming pools, constructive sites, trampolines and play structures. Refers to an insurer’s intentional refusal to fulfill its contractual obligations to the policyholder or a claimant. This can include unreasonably denying or delaying a valid claim, failing to investigate a claim properly, or not acting in the insured’s best interest. Bad faith is often considered a violation of the insurer’s duty to deal fairly and honestly with its policyholders. When an insurer fails to meet its legal obligation to the insured, such as delaying Bad Faith or denying a valid claim. A legal obligation requiring individuals or organizations to exercise a reasonable level of care to avoid causing harm to others. In personal injury and property liability cases, duty of care is a key component, as it establishes the responsibility of one party to ensure the safety and well-being of others Duty of Care within certain situations. Emotional Distress Mental suffering caused by trauma, often part of non-economic damages. In a personal injury case, the burden of proof lies with the plaintiff (the injured party), meaning the plaintiff is responsible for presenting evidence Burden of Proof on the Plaintiff that meets the required legal standard to establish that the defendant’s actions caused their injury. Expert Witness A professional who provides specialized knowledge in court. A legal concept that refers to the ability to anticipate or predict that certain actions or conditions could lead to harm or injury. In negligence cases, foreseeability plays a critical role in establishing whether a defendant should have reasonably anticipated the risk their actions (or inactions) posed to Foreseeability others. If harm was foreseeable, the defendant might be found liable for not taking preventive measures. Legal Basis Refers to the underlying legal foundation or justification for a claim.  Negligence: Legal Basis: A personal injury claim can be based on negligence if the plaintiff can show that the defendant owed them a duty of care, breached that duty, and caused harm as a result. Example: In a car accident case, a driver running a red light and causing an accident may be held liable based on negligence, as they failed to follow traffic laws and endangered others. Strict Liability: Legal Basis: Under strict liability, certain defendants can be held responsible for injuries regardless of intent or negligence, typically in cases involving inherently dangerous activities, defective products, or animal attacks (like dog bites). Example: If a dog bites someone in California, the owner can be held strictly liable under California law, regardless of the dog’s prior behavior or the owner’s knowledge of aggression. Premises Liability: Legal Basis: Premises liability holds property owners and occupiers responsible for injuries occurring on their property if they fail to maintain safe conditions. Example: If a customer slips and falls on a wet floor in a store because there was no warning sign, they may have a legal basis for a premises liability claim against the store owner. Product Liability: Legal Basis: Product liability law allows plaintiffs to recover damages for injuries caused by defective or dangerous products. Manufacturers, distributors, and retailers can be held strictly liable if a product is proven defective. Example: A person injured by a malfunctioning airbag could file a product liability claim against the car manufacturer, arguing that the defect directly caused their injury. Intentional Torts: Legal Basis: Intentional torts are wrongful acts done with intent, such as assault or battery, that cause harm. Personal injury claims can arise from intentional actions if the plaintiff can prove the defendant intended to cause harm. Example: If a person punches someone during an altercation, causing injury, the injured party may have a legal basis for a personal injury claim based on battery. Wrongful Death: Legal Basis: If a person dies due to another’s negligence, recklessness, or intentional act, surviving family members may file a wrongful death claim. Example: A family may file a wrongful death claim if a loved one dies in a car accident caused by a drunk driver, arguing that the driver’s negligence caused their loss. Vicarious Liability: Legal Basis: Vicarious liability holds one party responsible for the actions of another. In personal injury cases, this is often applied to employers who may be held liable for the negligent actions of their employees. Example: If a delivery driver causes an accident while on duty, the injured party might have a legal basis to hold the driver’s employer liable under vicarious liability. Negligent Infliction of Emotional Distress: Legal Basis: Plaintiffs can pursue claims for emotional distress if they suffer mental harm due to another party’s negligence, even without physical injury in some cases. Example: A person who witnesses a family member’s serious injury due to someone’s negligence might have a claim for emotional distress based Legal Basis Examples on the traumatic experience. Liability (Why a person is at fault) Legal responsibility for one’s actions or omissions. Litigation The process of taking legal action or going to court. A legal principle in personal injury and insurance law that ensures an injured party (the plaintiff) is fully compensated for their losses before any third parties, like insurers, can claim a portion of the recovery. This doctrine protects plaintiffs by prioritizing their right to be fully reimbursed or "made whole" for medical bills, lost wages, property damage, and other expenses resulting from an injury, loss, or damage, before any other party receives Made Whole Doctrine reimbursement. Negligence Failure to take reasonable care to avoid causing injury or loss. Refers to the intentional, reckless, or negligent destruction, alteration, or concealment of evidence that is relevant to a legal proceeding. When evidence is spoiled, it may hinder one party’s ability to prove or defend a claim, and it can have serious consequences in court. Courts generally take spoliation of evidence seriously, as it interferes with the judicial process and can lead to sanctions, adverse inferences, or other legal Spoilation of Evidence penalties against the party responsible for the spoliation. A legal and professional benchmark that defines the level of caution, attention, and prudence an individual or organization is expected to exercise in a given situation. It is used to evaluate whether someone acted reasonably and responsibly to prevent harm or injury. In negligence cases, establishing the standard of care helps determine if the defendant’s actions (or inactions) fell below this standard and thus contributed to the harm Standard of Care suffered by the plaintiff.  Refer to behavior that is prudent, cautious, and considers the potential consequences of one’s actions to avoid causing harm to others. In legal and professional contexts, acting “reasonable and responsibly” means following a standard that an average, sensible person would in similar Reasonably and Responsibly circumstances. This concept helps define whether someone met the standard of care expected in a situation.