Negligence, legal liability, damages and the structure of liability policies are covered in the national Casualty Insurance Basics guide. This guide covers the Nebraska law behind those concepts that the Casualty exam tests:

• the comparative negligence rule
• joint and several liability
• cancellation notice for liability policies
• the Nebraska Property and Liability Insurance Guaranty Association

Comparative negligence (25-21,185.09)

• A claimant's damages are reduced in proportion to the claimant's own negligence.
• Recovery is barred entirely if the claimant's negligence is equal to or greater than the total negligence of all defendants.
• Example: $100,000 of damages with the claimant 30% at fault means a recovery of $70,000. At 50%, the claimant recovers nothing.

Joint and several liability (25-21,185.10)

When there's more than one defendant:

• Economic damages (medical bills, lost wages) are joint and several.
• Noneconomic damages (pain and suffering) are several only, allocated by each defendant's percentage of negligence.

Liability policy rules

• Casualty line (44-4054(1)(d)). It covers legal liability, including liability for death, injury, disability, or damage to real or personal property.
• Cancellation and nonrenewal (44-522):
  • Liability policies and binders need 60 days' notice with the reason, or 10 days for nonpayment.
  • After 60 days, cancellation is allowed only for listed reasons.
  • This section doesn't apply to auto or workers' comp, which have their own rules.
• Attorney fees (44-359). An insured who wins a judgment on a policy recovers a reasonable attorney's fee.
• Residual markets (44-7528). Insurers may agree, with the Director's approval, to share risks for applicants who can't get coverage through ordinary methods. One example is the auto assigned risk plan.

The guaranty association (44-2401 and following)

The Nebraska Property and Liability Insurance Guaranty Association pays certain covered claims of insolvent member insurers. Membership is a condition of an insurer's authority to do business.

• Limits (44-2406):
  • up to $300,000 per covered claim
  • unearned premium up to $10,000 per policy
  • workers' comp claims paid as required by law
• Timing. Claims are covered if they arise within 30 days after the insolvency is determined, or sooner if the policy expires or the insured replaces or cancels it.
• Exclusions. Punitive or exemplary damages aren't covered (44-2403). The association also doesn't cover ocean marine.
• Other coverage first. A claimant with another policy must exhaust it first (44-2411).
• Funding. The association has three accounts: workers' comp, auto and all other. Assessments are capped at 1% of net direct written premiums a year (44-2404, 44-2407).
• Advertising. Member insurers may not advertise the association's coverage (44-2416).

Common exam traps

• Nebraska uses a 50% bar: a claimant at 50% or more fault recovers nothing.
• Noneconomic damages are several only. Economic damages are joint and several.
• The guaranty association pays up to $300,000 per claim, and assessments are capped at 1%.
• Liability cancellation notice is 60 days with the reason, or 10 days for nonpayment.