Download this Paper Open PDF in Browser

Liability Insurance at the Tort-Crime Boundary

19 Pages Posted: 10 Dec 2008  

Tom Baker

University of Pennsylvania Law School

Date Written: December 7, 2008


This essay explores how liability insurance mediates the boundary between torts and crime. Liability insurance sometimes separates these two legal fields, for example through the application of standard insurance contract provisions that exclude insurance coverage for some crimes that are also torts. Perhaps less obviously, liability insurance also can draw parts of the tort and criminal fields together. For example, professional liability insurance civilizes the criminal law experience for some crimes that are also torts by providing defendants with an insurance-paid criminal defense that provides more than ordinary means to contest the state's accusations. The crime-tort separation in liability insurance cannot be explained by economic incentives, alone. Morality matters, too. The fact that liability insurance sometimes provides coverage for criminal defense costs suggests that liability insurance institutions could cover a broader swath of crime torts than they do, providing further support for the claim that consequentialist reasoning, alone, cannot explain the observed relationship between liability insurance, torts, and crime. The tort-crime separation reflects and reinforces a concept of liability insurance as protection for defendants, rather than as a fund for victims. In turn, this concept of insurance reflects and reinforces an understanding of tort claims as encounters between particular plaintiffs and defendants, rather than as a price setting or loss spreading insurance mechanism.

Keywords: Liability insurance, tort, torts, criminal law, crime torts, economic incentives, morals, moral reasoning, consequentialism, price setting, loss spreading

JEL Classification: G22, K13, K14

Suggested Citation

Baker, Tom, Liability Insurance at the Tort-Crime Boundary (December 7, 2008). U of Penn, Inst for Law & Econ Research Paper No. 08-32; U of Penn Law School, Public Law Research Paper No. 08-52. Available at SSRN: or

Tom Baker (Contact Author)

University of Pennsylvania Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States
215-746-2185 (Phone)


Paper statistics

Abstract Views