This imposition of vicarious liability was along with a legislative intervention relating to automobile insurance. In the Automobile Insurance Act, adopted as part of the Insurance Act generally in most provinces, certain features were imposed upon all automobile liability policies.
Specifically, insurers were required to agree to provide cover against liability imposed by law upon the insured named in the contract each other person who with his consent personally drives an automobile owned by the insured for loss or damage, due to the ownership, use or operation with the motor vehicle. How to spend more and save less – I was reading this
This provision addressed the issue posed by the most popular law dependence on privity of contract which had caused the Privy Council to deny the claim for indemnity through the daughter of your named insured owner within a liability policy. More generally, it ensured that, in which the owner had liability insurance, its proceeds were available as compensation to get a third party injured or otherwise caused loss from the negligent operation from the insured vehicle. Quite simply, it made compensation more widely available.
A particularly significant statutory modification of common law contract rules was obviously a provision giving a wounded third party an immediate right of action against the insurer of the baby – usually the automobile owner – primarily liable. Unlike the direct action available with respect to non-automobile insurance, the right of action in automobile cases isn’t prejudiced by the insureds violation of the law or policy terms, or by the invalidity of the policy arising, for instance, from a material non-disclosure. Although the insurer may, in some circumstances, claim reimbursement from 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 need a tort claim up against the insured, but any contractual impediments pertaining to the insured’s rights up against the insurer usually do not prevent recovery.