C111 Chapter 3 Advanced Loss Adjusting



  1. What warranty is implied when a seller sells a good? – The seller must warrant to a buyer that the item sold is suitable for the purpose for which it is purchased. Pg. 03
  2. What actions demonstrate that a seller has warranted the product reasonably fit for its purpose? – If the seller describes the item, advertises or fits within the sellers scope of business. Pg.04
  3. What provisions might a warranty of fitness contain to limit liability? – The item must be free of any latent defects which renders it unfit for the use it was intended. Pg 05
  4. What must a claimant demonstrate to succeed in a tort claim against a manufacturer? – The goods were negligently designed or manufactured. Also, that a contract exists between them and it was breached. Pg. 06
  5. What 5 questions could a loss adjuster ask when examining a claim of negligence in the design or manufacture of a product? –
    • Was the product defective or design flawed?
    • Did the defect cause the injury?
    • Was the manufacturer negligent in causing the defect?
    • Was the designer of the product negligent?
    • Did the manufacturer fail to exercise reasonable care? Pg 06
  6. What is the required standard of care for the sale of products? – Reasonable care in the circumstances. i.e. less stringent if product is used by large commercial operations, higher standard for general public use, highest standard of care for products used or applied to children. Pg. 07
  7. What importance is packaging and materials sold with a product as part of an investigation? – Adjuster must analyze the information provided to ensure it meets legislated standards and to compare to similar products. Pg 08
  8. What must an adjuster investigate when claim is based on inadequate warnings or labels? – the information must be adequate for the user to make an informed decision as to whether to accept the risk of using the product. Pg.08
  9. How does the inherent danger of a product affect the standard of care owed to the consumer?- As the consumers chance of severity of injury increases, the manufacturer’s responsibility for taking precautions and providing warnings also increases. Also, the manufacturer must prove they are NOT negligent (burden of proof shifts).Pg. 09
  10. What must a claimant demonstrate in a claim advanced as a breach of warranty? – That there was a breach and the damages resulted from the breach. The claimant does not need to prove negligence. Pg. 12
  11. Define the defence theory of violent non fit injuria as it relates to products liability claim. – “Voluntary assumption of risk” relies on the theory that those who waive their rights are not protected by law. (i.e. The person knows there is a defect and uses the product anyway). Pg. 16
  12. How can the defence of abnormal use be applied to a products liability claim? -  If the defence (manufacturer) can prove that the product was put to a use that was totally unpredictable, it will be absolved of liability. Pg. 16
  13. In what circumstances is strict liability applied to products claims? - Under strict liability, the manufacturer is liable if the product is defective, even if the manufacturer was not negligent in making that product defective. Strict liability applies to dangerous products, food and drink and medicines. Pg. 06


  1. Outline the stages in a products liability investigation. –
    • Asses Coverage
    • Gather information and apply the law
    • Define if others are responsible for defect
    • Loss mitigation
    • Pg.10-15
  2. Which legal principles affect a finding of liability against professionals? – The principles of breach of contract and Negligence in torte. Pg.19
  3. Why is the standard of care higher for professionals?- Because professionals hold themselves out as possessing superior knowledge and skills. Pg.19
  4. What degree of skill does the law expect from a professional? – To the standards of conduct for the professional organization the member belongs to. The professional is expected to perform at the same level as others with similar training, in the same or a comparable community. Pg.19
  5. What standard governs the duty of care that a lawyer owes when giving legal advice? – What a competent practitioner would do given the same circumstances. An error in judgement is NOT grounds for negligence. Pg.19 & 22
  6. The standard of care governing advice given by lawyers extends to whom? – To clients and others that may be affected by the lawyers actions. There need not be a contract existent to claim negligence. Pg. 23
  7. What role does a consulting medical expert play in assessing a medical malpractice claim? – To make an assessment of the injury so the adjuster can evaluate the severity of the case. Pg.24
  8. In a medical malpractice case, what must the claimant prove? – The doctor was negligent in treatment and advice. Pg. 25
  9. What elements must be examined in a dental malpractice claim? – Similar to medical practitioners:
    • Informed Consent must be obtained
    • Treatment without consent is battery
    • Higher standards for specialists
    • Must establish a link between the injury and the breach of standard of care
  10. In a druggists liability claim, what parties might be responsible for the injury? – The druggist, the manufacturer, the doctor or even the claimant.
  11. 3 areas in which architects and engineers may be found negligent:
    • Inadequate site inspection
    • Negligent proposal
    • Defective designs, plans or specifications
  12. How does the business judgement rule affect directors’ and officers’ liability? – It allows directors and officers to make decisions without fear of liability as long as duties are discharged in good faith in the best interest of the corporation. Pg. 28