Provides relative to direct actions by third parties against insurers
Impact
The implications of HB 266 are noteworthy as they alter existing rights granted to third parties in liability insurance claims. By restricting direct actions against insurers, the bill potentially shifts the burden onto injured parties to secure judgments against the insured before seeking compensation from the insurer. This may lead to complications for victims trying to navigate the legal system, particularly in instances where the insured is bankrupt, deceased, or otherwise unavailable. It also emphasizes the importance of insured individuals maintaining adequate policies to protect potential claimants.
Summary
House Bill 266 proposes significant amendments to how third parties can take direct legal action against motor vehicle liability insurers in Louisiana. Under the current law, an injured third party has the right to sue both the insurer and the insured, or just the insurer in certain specified situations. The bill intends to limit the conditions under which third parties can directly sue insurers by narrowing the exceptions available. If the specific conditions are not met, third parties would need to file lawsuits directly against the insured to establish liability before pursuing any claims against the insurer.
Sentiment
The sentiment surrounding HB 266 appears to be mixed, reflecting concerns over access to justice for injured parties. Proponents of the bill may argue that it protects insurers from frivolous lawsuits and promotes a more manageable litigation environment. However, opponents are likely to view it as an erosion of consumer rights and a barrier to justice for those who have already suffered harm. The debate highlights a broader tension between the interests of insurance companies and the rights of individuals seeking recompense for damages.
Contention
Opponents of the bill assert that limiting the ability to sue insurers directly undermines the ability of injured individuals to receive timely compensation, placing unnecessary hurdles in their way. Key concerns center on the implications for the legal landscape in Louisiana, particularly regarding the equitable treatment of victims and the overall efficacy of the insurance system. Advocates for reform argue that such changes may disproportionately affect vulnerable populations who rely on the insurance system for support following accidents or injuries.
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)
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)