• An accident claim is a type of liability claim in which a witness to an accident experiences some form of mental distress due to having witnessed the event. The question of whether the emotional stress and trauma of a witness falls under the definition of “injury” may arise during the course of the trial. Some car accidents involve situations where one person is seriously injured and the other passenger can get away with minor scratches. In this case, non-injured passengers may report emotional distress or trauma because they witnessed the injuries of other passengers. Another example would be a mother who witnesses her small child being mauled by a neighbor’s dog. Some courts will recognize these types of claims if (1) the witness was at or near the scene of the incident, (2) the mental distress resulted from direct emotional impact on the witness as a result of sensory observation of the event, and (3) the witness and victim were closely related (for example, mother and child), as opposed to more distant relationships.

  • A bond is a tripartite contract in which an insurer agrees to pay damages caused by criminal acts (such as a pledge of fidelity) or the failure to perform a specific act (such as a performance obligation or surety). The principal (i.e., the party paying the premium on the bond) is also called the debtor (i.e., the party with an obligation to perform). In the event of a default, the guarantor (i.e., the insurer) pays for the losses of the third party (creditor). Then the debtor must reimburse the guarantor for the amount of the paid loss.