Negligence, damages, and how liability policies respond are covered in the national Casualty Insurance Basics guide. Arkansas adds its comparative fault statute, its definition of casualty insurance, and minimum standards for claims-made and other commercial liability policies (Ark. Code 23-79-306 and -307).

Comparative fault (16-64-122)

• A claimant whose fault is less than the defendant's recovers damages reduced in proportion to the claimant's own fault. For example, $100,000 in damages with 30% fault means a $70,000 recovery.
• A claimant whose fault is equal to or greater than the defendant's recovers nothing from that defendant.
• "Fault" includes any act, omission, risk assumed, or breach of warranty or legal duty that proximately causes damage.

What casualty insurance includes (23-62-105)

Arkansas's definition of casualty insurance includes:

• vehicle insurance
• liability insurance
• workers' compensation and employer's liability
• burglary and theft (including forgery and fraud)
• glass
• boiler and machinery
• credit
• malpractice

Claims-made liability policies (23-79-306)

• The application and first page must carry a conspicuous notice that the policy is claims-made.
• On cancellation or termination by either party, the insurer must provide a free automatic extended reporting period of 60 days.
• An extended reporting endorsement's aggregate must be at least the greater of the remaining expiring aggregate or 50% of the aggregate at inception.
• The retroactive date may be advanced only with the first named insured's written consent, and only on a change of insurer, a substantial change in operations, or the insured's request.
• Loss information must be provided within 30 days of the insured's request, and within 15 days after a cancellation or nonrenewal notice.

Other commercial liability standards (23-79-307)

• A policy with an aggregate limit must include a notice that the limit is an aggregate.
• Defense within limits is allowed only if a separate defense limit is offered, and never in an auto liability policy.
• A policy that excludes punitive damages must define them substantially as the statute does.
• Nonrenewal of a commercial liability policy requires 60 days' written notice, except for nonpayment.

Common exam traps

• At 50/50 fault, the Arkansas claimant recovers nothing.
• Workers' compensation and employer's liability are casualty lines under Arkansas's definition.
• Claims-made policies get a free 60-day automatic extended reporting period.
• Auto liability policies may never use defense within limits.