Strict liability, sometimes called absolute liability, is a legal doctrine in tort law that makes a person responsible for the damages caused by their actions regardless of fault or intent. The elements of a strict liability tort are similar to the elements of a negligent tort (duty, breach, and injury) except that in a strict liability case, the victim doesn't need to prove negligence. It doesn't matter what sort of precautions the individual takes, or if the individual had good faith intentions. Strict liability is common in activities that are inherently dangerous, such as demolition projects, cases where animals are involved, storing explosives, or using hazardous materials.

However, the most common strict liability cases pertain to defectively manufactured products or drugs. In such cases, purchasers of the product, as well as injured guests, bystanders, and others with no direct relationship with the product may sue for damages caused by the product, regardless of the manufacturer's intent.

Most Common Strict Liability Torts include:

  • Liability in manufactured products
  • Housing of wild or ferocious animals
  • Abnormally dangerous activities (e.g., storing, transporting, or using explosives in a populated area)

In most cases, insurance companies will decline to cover activities that have a high correlation to causing strict liability torts. If they do offer coverage, the premiums will be adjusted higher in accordance with the higher risk assumed.


Business Related Risk Exposures

Related Articles
  1. Investing

    Understanding Total Liabilities

    Total liabilities are the combined debts an individual or company owes.
  2. Taxes

    What is a Tax Liability?

    Tax liability is the amount of money a person or entity owes to the government as the result of a taxable event.
  3. Investing

    Examples Of Asset/Liability Management

    In its simplest form, asset/liability management entails managing assets and cash inflows to satisfy various obligations; however, it's rarely that simple.
  4. Investing

    Current Liabilities

    Current Liabilities are company debts due within one year or one operating cycle, whichever is greater. An operating cycle is the time it takes a company to purchase inventory and convert it ...
  5. Investing

    Explaining Noncurrent Liabilities

    Noncurrent liabilities are financial obligations a company owes a year or more into the future.
  6. Investing

    Figuring Out How To Cover Your Liability Bases

    Whenever we talk about the asset-liability approach to portfolio management (ALM), the concepts of immunization and cash flow matching come into play.
  7. Managing Wealth

    Protect Your Assets from Liability in Illinois

    Asset protection is a fundamental part of risk management. Use these tips to protect your assets.
  8. Investing

    What is Contingent Liability?

    A contingent liability is an amount that might have to be paid in the future, but there are still unresolved matters that make it only a possibility. Lawsuits and the threat of lawsuits are the ...
  9. Financial Advisor

    Coverage of Fiduciary Liability Insurance

    As fiduciaries, retirement plan sponsors have tremendous personal liability exposure. Find out how fiduciary liability insurance can protect personal assets.
  10. Financial Advisor

    What Kind of Insurance Do RIAs Need?

    Advisors spend a lot of time discussing insurance with clients but they also need to consider their own coverage needs as small-business owners
Frequently Asked Questions
  1. Where else can I save for retirement after I max out my Roth IRA?

    The first option to explore is to determine if you can contribute to a 401(k), 403(b), or 457 plan at work. If your employer ...
  2. How did George Soros "break the Bank of England"?

    In Britain, Black Wednesday (September 16, 1992) is known as the day that speculators broke the pound. They didn't actually ...
  3. What counts as "debts" and "income" when calculating my debt-to-income (DTI) ratio?

    It's important to know your debt-to-income ratio because it's the figure lenders use to measure your ability to repay the ...
  4. Who are Monsanto's main competitors?

    Learn about Monsanto Company's two main operating divisions and its main competitors within each sector, including The Mosaic ...
Trading Center