Regulation by Liability Insurance: From Auto to Lawyers Professional Liability

40 Pages Posted: 9 Feb 2013 Last revised: 4 Sep 2013

See all articles by Tom Baker

Tom Baker

University of Pennsylvania Carey Law School

Rick Swedloff

Rutgers Law School

Date Written: 2013

Abstract

Liability insurers use a variety of tools to address adverse selection and moral hazard in insurance relationships. These tools can act on insureds in a manner that can be understood as regulation. We identify seven categories of such regulatory activities: risk-based pricing, underwriting, contract design, claims management, loss prevention services, research and education, and engagement with public regulators. We describe these activities in general terms and then draw upon prior literature to explore them in the context of five areas of liability and corresponding insurance: shareholder liability, auto liability, gun liability, medical professional liability, and lawyers’ professional liability. The goal is to develop a conceptual framework to guide qualitative research on liability insurance as governance for initial application to lawyers’ liability and insurance.

Keywords: Liability insurance, administrative regulation, risk, behavior, directors and officers liability insurance, car insurance, insurance for guns, malpractice insurance

JEL Classification: G22, K13, K23

Suggested Citation

Baker, Tom and Swedloff, Rick, Regulation by Liability Insurance: From Auto to Lawyers Professional Liability (2013). UCLA Law Review, vol. 60, p. 1412, 2013, U of Penn, Inst for Law & Econ Research Paper No. 13-4, Available at SSRN: https://ssrn.com/abstract=2202314

Tom Baker (Contact Author)

University of Pennsylvania Carey Law School ( email )

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

HOME PAGE: http://www.law.upenn.edu/cf/faculty/thbaker/

Rick Swedloff

Rutgers Law School ( email )

217 N. 5th Street
Camden, NJ 08102
United States

HOME PAGE: http://law.rutgers.edu/directory/view/swedloff

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