TORT & INSURANCE
WORKSHOP
 North
Carolina State University
April 2002
David Drooz, Associate General Counsel
Jim 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 Affairs
919

- 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. CATEGORIES OF TORTS
 A.
NEGLIGENCE
 B.
GROSS NEGLIGENCE
 C.
INTENTIONAL
 D.
STRICT LIABILITY
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
III. TORT CLAIMS ACT
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

$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. 143215.104
Car Accident Immunity - G.S. 20-166(d)


IV. Insurance and Risk
Management
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
TORT & INSURANCE WORKSHOP

THE END