An overview of large technological systems in society to ascertain the prevalence of situations that can lead to catastrophic effects where the resultant liabilities far exceed the insurance or assets subject to suit in court, thereby imposing de facto limits on liability. Several potential situations are examined, including dam rupture, aircraft crash into a sports stadium, chemical plant accident, shipping disaster, and a toxic drug disaster. These events are estimated to have annual probabilities similar to or larger than a major nuclear accident. All are found to involve potential liability far exceeding the available resources, whether they be insurance, corporation assets, or government revenues. If limits on liability represent an important problem for society, the problem is general and should be dealt with from that perspective.
This report is part of the RAND Corporation Paper series. The paper was a product of the RAND Corporation from 1948 to 2003 that captured speeches, memorials, and derivative research, usually prepared on authors' own time and meant to be the scholarly or scientific contribution of individual authors to their professional fields. Papers were less formal than reports and did not require rigorous peer review.
Our mission to help improve policy and decisionmaking through research and analysis is enabled through our core values of quality and objectivity and our unwavering commitment to the highest level of integrity and ethical behavior. To help ensure our research and analysis are rigorous, objective, and nonpartisan, we subject our research publications to a robust and exacting quality-assurance process; avoid both the appearance and reality of financial and other conflicts of interest through staff training, project screening, and a policy of mandatory disclosure; and pursue transparency in our research engagements through our commitment to the open publication of our research findings and recommendations, disclosure of the source of funding of published research, and policies to ensure intellectual independence. For more information, visit www.rand.org/about/principles.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.