CAIA Liability and Negligence Principles 3 — Questions and Answers
Question 1: Under negligent entrustment theory, a vehicle owner can be held liable when they allow an incompetent driver to use their vehicle. What must the claimant prove?
- The owner was driving at the time of the accident
- The owner knew or should have known the driver was incompetent or unlicensed (Correct answer)
- The vehicle had a mechanical defect
- The driver was intoxicated at the time of the loan
Correct answer: The owner knew or should have known the driver was incompetent or unlicensed
Negligent entrustment requires proof that the vehicle owner knew or had reason to know the borrower was an incompetent, reckless, or unlicensed driver.
Question 2: Which standard of care applies to a professional automotive technician who inspected a vehicle shortly before a brake failure accident?
- The standard of a reasonable child
- The standard of an ordinary layperson
- The standard of a reasonably competent automotive technician (Correct answer)
- No standard applies because they are a third party
Correct answer: The standard of a reasonably competent automotive technician
Professionals are held to the standard of care of a reasonably competent member of their profession, not merely a layperson.
Question 3: A claimant alleges a driver ran a red light causing a collision, but no witnesses exist. The adjuster notes the driver has three prior red-light violations. How may these prior violations be relevant?
- They are irrelevant because each incident is separate
- They may establish a pattern of negligent behavior or recklessness (Correct answer)
- They automatically make the driver strictly liable
- They shift the burden of proof to the insurer
Correct answer: They may establish a pattern of negligent behavior or recklessness
Prior similar violations can be relevant to establish a pattern of negligent or reckless behavior, though admissibility varies by jurisdiction.
Question 4: What distinguishes 'gross negligence' from ordinary negligence in the context of auto insurance claims?
- Gross negligence involves an intent to harm
- Gross negligence involves a conscious, reckless disregard for others' safety (Correct answer)
- Gross negligence only applies to commercial vehicles
- Gross negligence requires physical injury only, not property damage
Correct answer: Gross negligence involves a conscious, reckless disregard for others' safety
Gross negligence involves a conscious and voluntary disregard for the need to use reasonable care, which is more severe than ordinary negligence but falls short of intentional misconduct.
Question 5: When an adjuster applies the 'but for' test to evaluate causation, what question is being asked?
- But for the plaintiff's negligence, would the defendant have acted?
- But for the defendant's negligent act, would the plaintiff's injury have occurred? (Correct answer)
- But for the insurance policy, would the claim be valid?
- But for the accident, would the parties have met?
Correct answer: But for the defendant's negligent act, would the plaintiff's injury have occurred?
The 'but for' test asks whether the plaintiff's injury would have occurred but for the defendant's negligent conduct — it is the standard test for actual cause.
Question 6: A driver causes an accident while experiencing a sudden, unforeseeable medical emergency (sudden incapacitation). How does this typically affect liability?
- It creates strict liability for the driver
- It may provide a complete defense if the incapacitation was truly unforeseeable (Correct answer)
- It doubles the driver's liability
- It shifts liability to the vehicle manufacturer
Correct answer: It may provide a complete defense if the incapacitation was truly unforeseeable
A sudden and unforeseeable medical emergency can negate the element of negligence because the driver lacked the ability to control their actions.
Question 7: In a dram shop liability scenario involving an auto accident, who may be held liable in addition to the at-fault driver?
- The vehicle manufacturer
- The establishment that served alcohol to the visibly intoxicated driver (Correct answer)
- The road maintenance authority
- The injured party's insurer
Correct answer: The establishment that served alcohol to the visibly intoxicated driver
Dram shop laws in many states impose liability on bars or restaurants that serve alcohol to a visibly intoxicated person who then causes an accident.
