Which term describes the liability arising from state laws governing business activities such as liquor sales and workers' compensation claims?

• A. Tort
• B. Statutory Liability
• C. Subrogation
• D. Statutes

Answer: (B)

Liability that comes from government statutes rather than from wrongful acts is being tested. In many regulated business activities, state laws impose specific duties and penalties—for example, liquor-control statutes for selling alcohol and workers’ compensation statutes for employment injuries. When failures to meet those statutory duties create civil liability, that liability is described as statutory liability, because it arises directly from the statutes themselves rather than from negligence or other fault.

This differs from a tort, which involves a breach of a duty owed to others through negligent or intentional conduct and usually requires proving fault. It’s also distinct from subrogation, which is an insurer’s right to recover paid claim costs from a responsible party, and from statutes in the abstract, which are the laws themselves rather than the liability those laws impose.