Edited by Mauro Bussani and Anthony J. Sebok
Chapter 7: Tort law and insurance
The article explores the interaction between tort law and liability insurance, both in theory and in reality. It shows how liability insurance plays a vital role not just in compensating victims of torts, but also in enabling or discouraging dangerous activities or developing new technologies. This includes an analysis of how different types of insurance (third-party and first-party, private and social, compulsory and optional) interfere with the deterrence function of tort law and which methods exist to overcome the resulting moral hazards.
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