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Faculty Scholarship at Penn Law

2005

Insurance

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Liability Insurance As Tort Regulation: Six Ways That Liability Insurance Shapes Tort Law In Action, Tom Baker Jan 2005

Liability Insurance As Tort Regulation: Six Ways That Liability Insurance Shapes Tort Law In Action, Tom Baker

Faculty Scholarship at Penn Law

Leaving aside difficult to interpret doctrinal developments, such as the abrogation of traditional immunities, liability insurance has at least the following six impacts on tort law in action. First, for claims against all but the wealthiest individuals and organizations, liability insurance is a de facto element of tort liability. Second, liability insurance limits are a de facto cap on tort damages. Third, tort claims are shaped to match the available liability insurance, with the result that liability insurance policy exclusions become de facto limits on tort liability. Fourth, liability insurance makes lawsuits against ordinary individuals and small organizations into repeat ...