Provides the option of a right of direct action against the insurer alone when the insured is a small business employing fifty or fewer full-time employees. (8/1/18)
Impact
This bill seeks to enhance the protections available to small businesses in Louisiana by simplifying procedures for filing claims against insurers. Previously, small businesses could only initiate direct actions against insurers under specific circumstances, such as insolvency or bankruptcy. By broadening these options, SB 139 aims to address the vulnerabilities faced by small enterprises, potentially leading to improved financial stability and recovery after damages. The legislation took effect on August 1, 2018, indicating the state’s commitment to supporting small business resilience in the face of liability challenges.
Summary
Senate Bill 139, introduced by Senator Luneau, enables a right of direct action against insurers for small businesses employing fifty or fewer full-time employees. The legislation amends existing provisions under R.S. 22:1269, which previously outlined the circumstances under which direct actions could be taken against insurers. The bill asserts that, in addition to the existing conditions, small businesses will have the ability to pursue direct action against their insurers alone when faced with liability claims, thus facilitating access to legal recourse for these entities.
Sentiment
Overall sentiment towards SB 139 appeared to be favorable among small business advocates who recognize the need for clearer pathways to claim insurance benefits. Many proponents argue that the bill strengthens the legal framework surrounding insurance and gives small businesses the necessary tools to navigate liability disputes effectively. Conversely, some concerns were raised regarding the potential for increased insurance claims and subsequent impacts on insurance premiums, which could strain the overall insurance market.
Contention
Despite its supportive intent, SB 139 sparked discussions about the ramifications of loosening restrictions on direct actions against insurers. Skeptics voiced concerns that allowing direct claims from small businesses could encourage frivolous lawsuits or lead to an expanded burden on insurance companies. The balance between protecting small businesses and ensuring the insurance market remains viable and sustainable was a key point of contention as the bill progressed through the legislative process.
Provides the option of a right of direct action against the insurer alone when the insured is a small business employing fifty or fewer full-time employees. (8/1/15) (EG NO IMPACT See Note)