This imposition of vicarious liability was accompanied by a legislative intervention concerning automobile liability insurance. In the Automobile Insurance Act, adopted within the Insurance Act in most provinces, certain features were imposed upon all automobile liability policies.
In particular, insurers was required to agree to provide cover against liability imposed for legal reasons upon the insured named in the contract each other person who along with his consent personally drives an automobile owned by the insured for loss or damage, arising from the ownership, use or operation with the motor vehicle. How to spend more and save less - she said
This provision addressed the problem posed by the common law requirement of privity of contract which had caused the Privy Council to deny the claim for indemnity through the daughter of a named insured owner under a liability policy. More generally, it ensured that, where the owner did have liability insurance, its proceeds were available as compensation for any third party injured or otherwise not caused loss through the negligent operation with the insured vehicle. Put simply, it made compensation more widely available.
A really significant statutory modification of common law contract rules was obviously a provision giving an injured third party a direct right of action up against the insurer of the baby – normally the automobile owner – primarily liable. Unlike the direct action available with respect to non-automobile liability insurance, the right of action in automobile cases isn’t prejudiced by the insureds violation with the law or policy terms, or through the invalidity of the policy arising, for instance, from a material non-disclosure. Although the insurer may, in a few circumstances, claim reimbursement in the insured, the clear purpose of this provision was, and is also, to make money accessible to injured victims. To obtain this benefit victims must still have a tort claim up against the insured, but any contractual impediments regarding the insured’s rights up against the insurer don’t prevent recovery.
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