Casualty Actuarial Society (CAS) Practice Exam

What type of liability exposure is Maria's injury classified as?

1. Product liability

2. Employment liability

3. Premises and operations liability

4. Environmental liability

The correct answer is: Premises and operations liability

Maria's injury being classified as premises and operations liability refers to situations where an individual is injured on a property that is owned or occupied by another party, often due to unsafe conditions or negligence related to maintenance and operations of that premises. This type of liability addresses claims arising from accidents and injuries occurring in the normal course of business operations at a physical location. In this case, for Maria's injury to fall under premises and operations liability, it suggests that the injury was a result of conditions present at a location where services are provided or business is conducted, rather than associated with a product flaw, employment issues, or environmental factors. If, for instance, Maria was injured due to a slip and fall on a wet floor in a store, this would directly tie into the expected responsibilities of the property owner or operator to ensure a safe environment for visitors. The other classifications, such as product liability, pertain to injuries caused by defective products, employment liability relates to issues arising in the workplace involving employees, and environmental liability deals with harm caused by pollution or hazardous activities. Since none of these categories align with the setting of Maria's injury being related specifically to the condition of a location, premises and operations liability is the most fitting classification.