Primary – Contingent – General Liability Exposures
General Liability Exposures
By: Allen Financial Insurance Group
Contact us for information about Primary, Contingent General Liability Exposures
Primary & Contingent General Liability Exposures:
A typical Resort or Recreational Management Facility conducts it’s business operations on several different risk levels simultaneously. These diverse functions represent an unusual combination of direct and contingent exposures that span the entire spectrum of public liability.
Premises & Operations Liability:
A direct primary liability exposure arises out of a premises owned or utilized by a MANAGEMENT FACILITY, or out of operations conducted at or away from those premises. The MANAGEMENT FACILITY is under a duty to conduct his operations with reasonable care to avoid injury or property damage to others. Since many operations are delegated to employees, agents or subcontractors, their negligence, if any, is imputed to the MANAGEMENT FACILITY under the doctrine of respondent superior (let the superior party answer).
The MANAGEMENT FACILITY can be defined as a contractor who, for a fixed price, undertakes to procure the performance of works for a client. If a portion of the work is subcontracted to another party the responsibility for the performance of the work to the client remains the same.
When subcontractors or independent contractors are used, the MANAGEMENT FACILITY is considered to be the “prime” or “general” contractor. The subcontractors are responsible for any injuries or property damage caused by their negligence or negligence of their employees. This responsibility runs not only to the general public but also to the employees of the general contractor and other subcontractors.
The MANAGEMENT FACILITY is assumed to have general supervision over the activities of subcontractors and is ultimately responsible for the reasonable safety of a premises or operation. Failure to meet this duty is actionable if it results in an injury to a client or member of the general public.
Vicarious liability may result from employer-employee relationships, principal-agent relationships or relationships with independent contractors. The principal of vicarious liability describes situations where the MANAGEMENT FACILITY will be held liable for the negligent acts of independent contractors or subcontractors – even though the MANAGEMENT FACILITY is otherwise free from all fault, did nothing to aid or encourage the subcontractors negligence, played no part in it, or even possibly did everything possible to prevent it.
As a general rule, a party is not normally vicariously liable for the torts of its agent or independent contractor. This is most often explained by the observation that, because the contractor does not control the manner in which an independent contractor does his work it is to be regarded as the subcontractor’s own enterprise.
The “general rule” relating to vicarious liability and acts by independent contractors is nearly swallowed up by no less than twenty-one recognized exceptions to the general rule.
The employment of an independent contractor will not insulate a MANAGEMENT FACILITY from vicarious liability for the acts of the contractor where the MANAGEMENT FACILITY fails to take reasonable precautions where there is a foreseeable chance of harm to others. It is the MANAGEMENT Facility’s duty, for instance, to exercise reasonable care to select a competent and careful contractor with the proper training, experience and equipment for the job.
The vicarious liability of a MANAGEMENT FACILITY for the negligent acts of agents or independent contractors is called “joint and several”. A liability is joint and several when an injured party sues one or more or the responsible parties separately or together for injuries suffered.
No agreement generally entered into by a MANAGEMENT FACILITY with an agent or independent contractor which attempts to secure an exemption from liability for harm caused by the negligence of the contractor is binding on the injured third party.