One definition of liability is “failure to do what a reasonable person would to prevent property damage or bodily injury.” Liability could arise out of an act or failure to act. Most people understand this theory when it’s applied to a situation involving an auto accident. One driver does something wrong and causes an accident involving property damage or bodily injury.
A less obvious example might involve something like the following scenario. A powerful storm moves through, and wind pushes John Smith’s tree onto his neighbor’s house. Smith calls his insurance company and requests they cover the damage to his neighbor’s home, but he’s informed his homeowner’s policy only covers property damage and bodily injury he’s legally obligated to pay. Since Smith didn’t fail to act as a reasonable person would, he isn’t negligent and not legally liable for the damage to the neighbor’s house. The loss should be turned in to the neighbor’s homeowner’s insurance carrier.
Adding a few additional details changes things dramatically. If the tree was dead or stressed and Smith was aware of its condition, the liability situation changes. By adding these two important components, Smith’s liability is now questionable. It could be argued that the tree was in a dangerous condition before the storm, and Smith failed to remove or maintain the it.
The important wording in the policy is damage the insured is “legally obligated to pay.” Even if the insured feels responsible, the policy won’t respond unless the insured is legally obligated because of negligence. This is just a simple example of issues that surround your liability. Please contact your local insurance professional to discuss other exposures you may have in your life. IBI