Reliability Insurance

November 7, 2024, 4 - 5 p.m.
Roy Baharad, SJD Candidate, University of Chicago Law School
Liability for harm not only incentivizes individuals to exercise optimal care and guarantees compensation to victims; it also serves the interest of potential injurers. The prospect of liability equips subjects with a “right to be sued,” which enables them to credibly signal their prudence in potentially harmful interactions, thus substantiating trust among counterparties. Liability for medical malpractice, for instance, bolsters the reliability of physicians exactly because they would be the ones suffering the cost of inadequate treatment. Oddly, however, individuals and businesses regularly waive their “right to be sued” by purchasing liability insurance. At its core, insurance is thus in tension with the informational power of liability. This talk examines when and how insurance might undermine credibility and attenuate policyholders’ reliability in the eyes of actors with whom they interact-business counterparties, employees, investors, audiences, regulators or patients.
Recommended Reading: Roy Baharad, Reliability Insurance