Results of Survey on Liability
Liability: Banneker Center Survey #197
Results of April Survey
Thank you for sending your opinions! Here is what you said.
Imagine two businesses. They have the same value in assets, the same income, the same expenses. They are in the same industry and face the same future. They are identical competitors, except that one has a grant of “limited liability” from the government, and the other does not. (Limited liability means that the business cannot be held liable for more than its total assets; the assets of individual directors, etc., are not at risk.)
If Business A, with limited liability, is worth $1 billion, how much is Business B, with no limited liability, worth?
Average answer was 46% less
Under current law, corporations and limited partnerships receive free limited liability insurance from the government; all extra liabilities are covered by the taxpayers. However, individuals, sole proprietorships, and non-limited partnerships do not receive any such coverage. Is that fair, or arbitrary?
50% said it’s a fair distinction
50% said it’s an arbitrary distinction
The insurance industry already sells various kinds of insurance to limit losses. Should the government compete with private insurance companies, by offering liability insurance?
24% said Yes
76% said No
0% said Sometimes
How important is limited liability to the growth and development of business?
49% said very important — businesses would willingly pay a lot for the privilege of limited liability
2% said not very important — few businesses would pay much for limited liability
49% said unsure
If government did not give away limited liability to corporations, some would do without and others would buy insurance from private companies. Transferring liability away from the U.S. taxpayers, and toward businesses and their insurers, is:
76% said a great idea
1% said a fairly good idea
22% said an indifferent idea
1% said a fairly bad idea
0% said a terrible idea
The Price-Anderson Act in the United States limits the liability of nuclear power corporations in case of nuclear accidents or sabotage at their power plants. In case of a nuclear accident or sabotage, the taxpayers and the victims would be expected to bear the liability beyond a small amount. Which statement most closely describes your view:
0% said Price-Anderson sounds like a good idea
100% said the risks of nuclear power should be borne by power plant owners, not taxpayers
0% said the Price-Anderson Act is a free-market idea
Corporation X pollutes a river. Some people die and it might be due to polluted water. The cost of removing the effects of the pollution is estimated at $25 million. Corporation X declares bankruptcy and the damage is never paid for, except by taxpayers and victims. Which statement most closely describes your view:
50% said corporations should be required to carry pollution insurance
0% said this situation is unfortunate, but there is nothing unfair about it
0% said polluting should be illegal unless the polluter has posted a bond equal to the likely costs of the pollution
25% said a free market is best for handling this kind of situation
25% said if corporation X did not break a law, we have no reason to complain