TORT & INSURANCE WORKSHOP
North Carolina State University April 2002
David Drooz, Associate General CounselJim Semple, Director, Insurance & Risk Management
N.C. State University
TORT & INSURANCE WORKSHOP
I. Practical info
II. What is a tort?
III. Liability – limits and defenses
IV. Insurance coverage
I. PRACTICAL INFO WHEN THERE IS AN ACCIDENT, INJURY ,
OR DAMAGE:
Get help Make record of what happened Report to supervisor Report to NCSU Insurance & Risk
Management Report to Office of Legal Affairs
I. PRACTICAL INFO Office of Insurance & Risk
Management 919 - 515 - 6124 http://www2.acs.ncsu.edu/insurance/
Office of Legal Affairs919 - 515 - 3071 http://www.fis.ncsu.edu/ncsulegal/
II. WHAT IS A TORT?
A WRONG OR INJURY TO ANOTHER,
APART FROM BREACH OF CONTRACT,
WHICH A COURT CAN REMEDY BY AWARDING DAMAGES
II. WHAT IS A TORT?
1. DEFENDANT MUST OWE A DUTY OF CARE TO THE PLAINTIFF
-- DUTY OF CARE IS IMPOSED BY LAW, NOT PRIVATE AGREEMENT
-- DUTY OF CARE IS THE ESSENTIAL INQUIRY IN ANY TORT CASE
II. WHAT IS A TORT? 2. DEFENDANT MUST HAVE
BREACHED THAT DUTY
3. THE BREACH OF DUTY MUST BE THE PROXIMATE CAUSE OF HARM TO PLAINTIFF
4.PLAINTIFF MUST HAVE SUFFERED ACTUAL DAMAGES
II. NEGLIGENCE TORTS
FAILURE TO USE REASONABLE CARE measured by prudent person in
similar circumstances
MOST MISTAKES AND ACCIDENTS ARE DUE TO “NEGLIGENCE”
II. NEGLIGENCE TORTS
Some university cases: Slip and fall Drowning Motor vehicles Negligent hiring Infliction of emotional distress Defamation
II. TORTS - CHILDREN
A child under 7 years of age is legally incapable of contributory negligence
Rebuttable presumption: child 7 to 14 years old is incapable of contributory negligence
Bottom line: Take extra care for safety of children
II. TORTS - PREMISES
For lawful visitors, you must make a reasonable effort to make premises safe. You are not an insurer of their safety.
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
Tort Claim Act / sovereign immunity Defense of State Employees Act Workers’ Compensation Contributory negligence Assumption of risk Liability waivers Volunteer immunity Public duty doctrine
III. SOVEREIGN IMMUNITY Sovereign immunity = the State cannot be
sued in tort without its consent
Only the General Assembly can give consent (it has done so in the Tort Claims Act)
Not a defense to federal claims (although 11th Amendment immunity may be a defense)
III. TORT CLAIMS ACT
NC General Statute 143-291 allows tort suits against the State - within limits:
FOR ORDINARY NEGLIGENCE CAUSED BY STATE EMPLOYEE (OR
AGENT)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
III. TORT CLAIMS ACT $500,000 limit on State’s liability for
all claims of injury and damage to any one person arising out of one occurrence
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 Amount paid by State is reduced by any
commercial liability insurance the State agency has
Cannot insure everything
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.C. General Statutes 143-300.3 et seq.
THE STATE MAY DEFEND EMPLOYEES AND AGENTS IN LAWSUITS BROUGHT AGAINST THEM PERSONALLY
III. DEFENSE OF STATE EMPLOYEES
"AGENTS" DEFINED THE SAME AS FOR TORT CLAIMS ACT
COVERS CIVIL AND CRIMINAL LIABILITY (NOT JUST TORTS)
FOR ACTS/OMISSIONS IN THE SCOPE AND COURSE OF AUTHORIZED SERVICE
III. DEFENSE OF STATE EMPLOYEES
DOES NOT COVER FRAUD, CORRUPTION, MALICE
DEFENSE ONLY IF ATTORNEY GENERAL DECIDES IT’S IN BEST INTEREST OF THE STATE
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
WORKERS’ COMPENSATION IS THE EXCLUSIVE REMEDY WHEN IT APPLIES Exception: harm caused by intentional injury
or gross negligence may give rise to tort suit
APPLIES TO EMPLOYEES WHO HAVE ACCIDENTAL INJURY, A TRAUMATIC INCIDENT, OR OCCUPATIONAL DISEASE FROM WORK-RELATED CAUSES
III. DEFENSE - CONTRIBUTORY NEGLIGENCE
WHERE BOTH PARTIES WERE NEGLIGENT, NC LAW BARS TORT CLAIM
Remember the exception for children
III. DEFENSE - ASSUMPTION OF RISK
NO TORT LIABILITY IF THE PARTIES HAD A CONTRACTUAL RELATIONSHIP AND PLAINTIFF VOLUNTARILY ACCEPTED RISKS E.g., hit by ball in stadium
Will not apply if injured party did not understand the risks, lacked bargaining power, or for public policy reasons
III. DEFENSE - LIABILITY WAIVERS / RELEASES
A CONTRACT NOT TO SUE
Uses words like “HOLD HARMLESS,” “INDEMNIFY,” “RELEASE,” “WAIVE”
Courts often refuse to enforce liability waivers
III. LIABILITY WAIVERS
1998 case of Fortson v. McClellan:
plaintiff signed liability waiver for college course on motorcycle safety
plaintiff was injured in the course due to motorcycle malfunction
the court ruled: public interest in motorcycle safety is enough to invalidate the liability waiver
III. VOLUNTEER IMMUNITY
Executive Order No. 48 (1980) and NCAC
Qualified Immunity for Volunteers Act - G.S. 1-539.10 (not for motor vehicle negligence)
First Aid Immunity - G.S. 90-21.14 and 21.15 Hazardous Material Immunity - G.S. 143-
215.104 Car Accident Immunity - G.S. 20-166(d)
IV. Risk Management Process
Identify Loss Exposures
Select Technique to Treat Exposures
Implement Technique
Monitor, Evaluate, and Modify Techniques
IV. Risk Management Techniques
Avoidance Insurance Contractual
Transfer
Separation of Exposure Units
Loss Control/Safety
IV. INSURANCE COVERAGE
The State pays for
Excess liability insurance Motor vehicle insurance miscellaneous other policies
You must pay for other coverage
IV. Purchasing Insurance All departmental
purchases of Property/ Casualty Insurance are arranged through NCSU-IRM
Any special purchase of liability insurance must be approved by the North Carolina Dept of Insurance
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
Excess of the Defense of State Employees Act ($ 500K)
Only if Attorney General authorizes defense
Covers Employees and Volunteers in the course and scope of duty/service to the University
Coverage Limits of $ 11 million per person/occurrence
IV. EXCESS LIABILITY POLICY
EXCESS LIABILITY POLICY EXCLUSIONS INCLUDE:
Employee claims covered by Workers Compensation, Unemployment compensation, or disability benefits law
Pollution, asbestos, and other toxic, hazardous, and explosive materials
IV. EXCESS LIABILITY POLICY
EXCLUSIONS CONTINUED
Nuclear materials and nuclear facilities Automobiles, planes, boats over 30 feet Medical malpractice Criminal acts One insured suing another (except Equal
Protection claims) Sexual assault or battery
IV. INSURANCE COVERAGE
STATE MOTOR VEHICLE INSURANCE
Covers damages to OTHER PARTIES for accidents that:
involve use of a state-owned vehicle
driven by a state employee on official business
IV. INSURANCE COVERAGE
State Motor Vehicle insurance DOES NOT COVER
agents or volunteers employees driving a non-state car 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 Required by Statute on
self-propelled vehicles Liability Limits of $
500K per person per accident, $ 5 million aggregate in state
Collision/ Comprehensive Coverage for temporary leased vehicles less than 30 days+ No CDW at rental agency
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
If a party damages University property, document facts of event
Report all accidents or malicious acts immediately to Police
If a result of construction project activity, notify Construction Management
Report such events to OLA and IRM for assistance if vendor-related
V. VEHICLE USE
State-owned passenger vehicles may be driven ONLY
by state employees on official state business.
No side trips for personal purposes.
V. VEHICLE USE
Rules for passengers who are not state employees:
No hitchhikers Driver may bring spouse, kids (no pets) 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
DRIVER IS RESPONSIBLE FOR:
Traffic fines, parking fines, towing costs for improper parking, safe-keeping of car .
V. VEHICLE USE
Federal employees:
Must first request federal vehicle.
If no federal vehicle is available, they may use state vehicle IF they are under contract to do state business
V. VEHICLE USE
Must report all accidents to the police (rule for use of state-owned vehicles)
Dollar amount of damage does not matter.
MORE INFO ON THE WEB
The NCSU Legal Affairs web site has NC State policies and legal topics.
http://www.fis.ncsu.edu/ncsulegal