ADR-A102: Liability direction from party roles

Status: Accepted Date: 2026-09-26 (proposed), 2026-09-26 (accepted) Related: ADR-A92 (derived artefacts), ADR-A98, ADR-A99 Unit: applied-insurance-reference (AIR-0.1) Sketches: term-parameters.md §7, asset-exposure-ontology.md §5.15

Context

Liability, D&O and E&O cover respond differently depending on who was harmed, who is alleged liable, who claims and who is paid: first party, third party, insured against insured, derivative actions, and fourth parties reached through an intermediary. Those parties are mostly unknown when the contract is bound. The peril vocabulary’s agency characteristic records who or what acted to cause an event, which is a different question (ADR-A99).

Party already reifies an occupancy of a role so that it can exist before anyone fills it (pty:RoleOccupancy, pty:inRole exactly one, pty:occupiedBy optional).

Decision

1. Four role individuals of pty:Role, in insurance/common/ (icm:): harmed party, liable party, claimant and payee.
2. Contracts name role types and populations, never people. At binding, scopes and requirements refer to a role and a population (exposure’s counterparty populations). At claim time, occupancies of those roles are created and filled. An occupancy may be created unfilled when a notice names a role before an actor is known.
3. Direction is derived, never asserted. Direction values (first party, third party, insured against insured, derivative, fourth party) are concepts in an icm: scheme. A direction is recorded only as a fnd:DerivedArtefact whose read set is the filled roles and the relationship graph (control relations, dependencies, counterparty populations). A shape reports a direction value without such a derivation.
4. Agency is not direction. No rule derives direction from the agency characteristic, and no peril concept carries a direction.
5. Scope of this decision. It fixes the representation, so that AIR-1.2 can declare the roles. The derivation rules, and D&O constructs such as Sides A, B and C, are specified with the contract and claims modules (epic Phases 5 and 6).

Consequences

• No Party change.
• A claim by a party unknown at binding needs no invented actor at binding and no rewrite of the contract.
• Fourth-party distance depends on relationship data being captured. The exposure ontology’s counterparty populations and dependencies supply it.
• New directions are new derivation rules, not new concepts asserted on each claim.