Edited by Mauro Bussani and Anthony J. Sebok
Chapter 7: Tort law and insurance
In academic theory, the relationship between tort law and liability insurance is quite simple: they are two different things, to be kept strictly apart. First you determine liability and only afterwards, if at all, is liability insurance to be considered. In reality, however, things are – at the very least – a bit more complicated. Apart from some rare intentional torts, where liability insurance is not an issue (neither is compensation, usually, due to the limited resources of the tortfeasor), liability is normally something to be dealt with between liability insurer and injured party, or even between liability insurer and first-party insurer. The discrepancy between theory and reality has obvious historical reasons: tort law is one of the oldest areas of law and had been around for thousands of years before liability insurance came into play. Even when liability insurance did become an option, usually in the Nineteenth or Twentieth Centuries, it was still a long way to a society where almost every liability risk is insured by almost everyone, as is the case today in Europe and, to a lesser extent, in many countries around the world. Some of the consequences of the central role of liability insurance in liability scenarios are quite obvious and accepted, as for instance its importance for compensating victims of accidents.
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