Collateral Source Rule

DEFINITION of 'Collateral Source Rule'

A common law rule of evidence pertaining to punitive or other damages awarded to a plaintiff for injury, illness or disability. The Collateral Source rule mandates that damages awarded in court cannot be reduced by any amount of other sources of income used to cover the damages suffered by the victim.

BREAKING DOWN 'Collateral Source Rule'

The Collateral Source rule is a legal edict that prevents evidence from being admitted in court that proves the plaintiff (or victim) is receiving compensation for injuries from other sources, such as insurance. This doctrine has been contested in court in recent years by those who feel that victims should not be able to sue tortfeasors again for damages that were already paid from another source.

RELATED TERMS
  1. Punitive Damages

    Legal recompense that is levied as punishment for a wrong or ...
  2. Civil Damages

    Civil damages are usually monetary awards due to a winning plaintiff ...
  3. Compensatory Damages

    Money awarded to a plaintiff to compensate for damages, injury, ...
  4. Treble Damages

    A law that permits a court to triple the amount of damages awarded ...
  5. Wrap-Around Insurance Program

    Provides punitive damages insurance for employment practices ...
  6. Tortfeasor

    The individual, company, or entity that is found to have committed ...
Related Articles
  1. Investing

    Stop Scams In Their Tracks

    Find out how to protect yourself and your loved ones from financial fraudsters.
  2. Investing

    Supreme Court Won't Hear Altria's Damages Appeal

    The U.S. Supreme Court declined to hear an appeal by Altria's (NYSE: MO) Philip Morris USA unit over a $25 million penalty it was assessed by a Portland, Oregon, jury in a case involving a smoker's ...
  3. Personal Finance

    What Is Collateral?

    Collateral is property or other assets that a borrower offers a lender to secure a loan. If the borrower stops making the promised loan payments, the lender can seize the collateral to recoup ...
  4. Personal Finance

    Cover Your Company With Liability Insurance

    Every business is susceptible to legal action. Find out how to protect yours.
  5. Managing Wealth

    Creating a Risk Management Plan for Your Small Business

    Learn how a complete risk management plan can minimize or eliminate your financial exposure through insurance and prevention solutions.
  6. Insights

    Oracle Battles Google for 9.3B in Damages

    Oracle and Google head to court to decide whether or not APIs are covered under fair use in copyright.
  7. Investing

    Advising FAs: Explaining Disability Insurance to a Client

    Disability is a very critical type of insurance that most individuals should consider carrying. When it comes to your personal finances, long-term disability can have a devastating effect if ...
  8. 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
  9. Trading

    The Disability Insurance Policy: Now In English

    Learn to translate this complicated policy so you can rest assured you're covered.
  10. Personal Finance

    4 Types of Insurance Everyone Needs

    Most experts recommend four types of insurance to provide a measure of protection from the unexpected: life, health, auto and long-term disability.
RELATED FAQS
  1. How does the 80% rule for home insurance work, and how do capital improvements affect ...

    The 80% rule refers to the fact that most insurance companies will not fully cover the cost of damage to a house due to the ... Read Answer >>
  2. How can I request a Social Security disability award letter?

    Learn about award letters and how to apply for Social Security disability benefits. Gain insight as to why disability applications ... Read Answer >>
  3. Does renters insurance cover water damage?

    Learn how renters insurance provides personal property coverage for items damaged by water only if the water is the result ... Read Answer >>
  4. What are some examples of unexpected exclusions in a home insurance policy?

    Learn about commonly excluded perils with different standard insurance policies. Explore events that homeowners should consider ... Read Answer >>
  5. What is the difference between the rule of 70 and the rule of 72?

    Find out more about the rule of 70 and the rule of 72, what the two rules measure and the main difference between them. Read Answer >>
  6. Does homeowners insurance cover tree damage?

    Discover how damage to a home from fallen trees is covered under your homeowners insurance policy if it happens suddenly ... Read Answer >>
Hot Definitions
  1. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  2. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  3. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  4. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  5. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  6. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
Trading Center