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Definition of Tort in Business Insurance

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Tort law has a long history. It began in Medieval times as a way to deliver compensatory fines for those in the wrong, be it a civil or criminal situation. After it became one of the eight rights of English citizens, tort law eventually made its way to America’s shores. It took until the mid-20th century for modern tort laws to be established.

Today, this form of law covers a majority of civil suits other than those that involve contracts. It maintains the framework of redress established in Medieval Europe. Relief from the wrongful acts done to others is provided through the reward of monetary compensation. Sometimes, the plaintiff receives the full amount requested. In other situations, a cash settlement is agreed upon by both parties.

Tort Categories

There are three sub-categories in tort law: negligent, intentional, and strict liability:

  1. Negligent torts are used when some form of harm is done to one party through the failure of another’s disregard to a standard of reasonable care. An automobile crash or workplace accident are examples of negligent torts. Though the involved parties never wanted it to happen, a lack of care caused an issue.

  2. An intentional tort is enacted when an individual or group is allegedly meant to harm others through willful misconduct. Fraud, theft, and assault are prime examples of this situation. These can also be considered criminal acts at the same time they are deemed civil issues. However, both criminal and civil cases can’t be held simultaneously. Usually, the former is resolved before the tort.

  3. Strict liability is a tort concerned more about the act that resulted in the lawsuit than the person who performed it. It doesn’t matter how much care was taken to avoid an issue or if it was intentional or not. For instance, a car manufacturer can be sued for a faulty design that led to the injuries and deaths of several vehicle owners. It doesn’t matter if they originally knew about the deficiency or not.

Legitimate vs. Frivolous Lawsuits

Though tort law makes it easier for individuals and groups to request compensation for harm, it also allows anyone to sue a person or company if they feel an injustice was done. While many lawsuits are legitimate, some are deemed frivolous.

Hence the reason some politicians and legal professionals have requested reforms to tort law. They feel the amount of suits has not only slowed down the courts but has also increased costs. Recently, tort reform has focused on health insurance and the medical industry. The goal is to reduce the use and costs of unnecessary tests and pharmaceuticals. However, anti-tort reform activists point to statistics that they claim show there has been no explosion of litigation.

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