How to know if you are legally liable

As trusted advisors, we often have clients describing situations, concluding with the question: “Am I legally liable for this?”

The most definitive answer can only come from a court after considering the circumstances and evidence.

But the test of legal liability – also called a tort – is fairly simple:

• did one party owe another a duty of care – in other words, does common law expect a standard?
• was that duty of care breached?  Or was there a failure to uphold the law-imposed standard?
• did compensable “damages” (injury to persons or property) result?

This 3-step process is simple, but the application to a real-life scenario is often quite complex – that’s why we need lawyers and civil courts.

Criminal courts decide by the standard of “beyond a reasonable doubt”.  But civil courts need only be convinced on the balance of probabilities to award damages.

And in our experience, the Canadian legal system frequently broadens the definitions of “duty of care”, and heightens the financial amounts required for compensation or “damages”.

Most people carry very broad liability coverage as part of their residential insurance coverage – often more protection than they realize – and also as a component of their vehicle insurance.

Best advice: know what your liability policies cover, and for how much.  That’s where a trusted advisor is invaluable.

Tags: advice, broker, claims, coverage, Liability, risk