Canadian Accredited Insurance Broker (CAIB) Three Practice Exam

Under the Doctrine of Strict Liability, when is a person presumed legally liable?

1. When they commit fraud

2. When engaging in hazardous activities

3. When causing minor accidents

4. When they are negligent

The correct answer is: When engaging in hazardous activities

Under the Doctrine of Strict Liability, a person is presumed legally liable primarily when engaging in hazardous activities. This principle is rooted in the understanding that certain actions carry inherent risks that can lead to harm, regardless of the precautions taken or intent of the individual participating in such activities. For example, if an individual is operating a chemical plant, they are held responsible for any accidents or damages caused, even if they followed all safety protocols. This liability exists because the potential harm to others is significant when engaging in these high-risk endeavors, and society places a higher expectation on individuals or businesses that choose to undertake them. Thus, the focus is on the nature of the activity itself rather than the individual's intent or level of care. In contrast, committing fraud, causing minor accidents, or being negligent do not automatically invoke strict liability; they may require proof of wrongdoing or failure to meet a standard of care, which means liability must be established through a different legal framework.