Which liability arises from law or regulation?

Which liability arises from law or regulation?

• A. Negligence
• B. Recovery
• C. Regulatory or statutory liability
• D. Reservation of Rights letter

Answer: (C)

Liability that comes from law or regulation means obligations imposed by statutes or regulatory rules, so penalties or duties arise just because the rule exists and is violated. This can happen without proving fault in the traditional sense, especially in strict-liability or regulatory contexts. For example, failing to meet environmental or data-protection requirements can trigger penalties simply for non-compliance, not because someone was negligent. In contrast, negligence is liability that stems from a failure to exercise reasonable care, requiring a duty, a breach, causation, and damages—a tort concept that depends on conduct rather than just breaking a rule. Recovery describes obtaining damages and isn’t a type of liability category itself. A Reservation of Rights letter relates to insurance defense and coverage decisions, not to a liability arising from law or regulation. So the best choice is regulatory or statutory liability, since it specifically denotes liability created by laws or regulations.

Liability that comes from law or regulation means obligations imposed by statutes or regulatory rules, so penalties or duties arise just because the rule exists and is violated. This can happen without proving fault in the traditional sense, especially in strict-liability or regulatory contexts. For example, failing to meet environmental or data-protection requirements can trigger penalties simply for non-compliance, not because someone was negligent.

In contrast, negligence is liability that stems from a failure to exercise reasonable care, requiring a duty, a breach, causation, and damages—a tort concept that depends on conduct rather than just breaking a rule. Recovery describes obtaining damages and isn’t a type of liability category itself. A Reservation of Rights letter relates to insurance defense and coverage decisions, not to a liability arising from law or regulation.

So the best choice is regulatory or statutory liability, since it specifically denotes liability created by laws or regulations.