Third-Party Insurers

Claims made against bodily injury liability insurance policies – that is, against the insurance policies of the person or persons who may be legally “liable” for the injuries and damages of someone who has been injured – are considered “third-party” claims. In this context, the insurance companies are “third-party” insurers.

Determining any and all third-party insurers for a given incident is a primary responsibility of a personal injury attorney since doing so will most directly identify the liability insurance funds potentially available for satisfying the injury victim’s claims, as well as identifying the claim handlers who need to be contacted and put on notice of actual or potential claims.

In many auto accident cases, there may be only a single bodily injury liability policy available for resolving claims against the person who caused the accident and resulting serious injuries.  But in many other accident situations, there may be two, three, or even more possible bodily injury liability policies against which claims can be made.

The most obvious place to look for liability insurance coverage is the negligent driver who caused the collision that resulted in injuries.  Individuals in California are required to have liability insurance in place when driving a vehicle -- being unable to produce evidence of coverage to a police officer is a violation of the California Vehicle Code and can result in a fine.  Of course, it is also a significant financial risk for anyone to drive without liability coverage – it places them at direct, personal risk of having to pay out of their own assets or wages for vehicle damage and/or injuries that they may accidentally cause.  From a legal standpoint, a negligent driver is the person most directly liable for any and all legal damages that they may cause.

In California, it’s required that the owner of a motor vehicle have a policy of bodily injury liability insurance in the minimum amount of $15,000 per person and $30,000 per incident bodily injury coverage policy limits and $5,000 per incident property damage liability policy limits.  Providing proof of current insurance coverage is required when we register vehicles each year with the DMV.

In many instances, the liability of a vehicle owner who lends their vehicle to a driver who negligently causes injuries may be limited, however, by the “permissive use” laws.  California Vehicle Code Section 17151 limits an owner’s liability in this situation generally to $15,000 per person and $30,00 per incident bodily injury liability and $5,000 property damage per incident.  This limit does not apply in all situations, however, if the driver was an employee of the owner, the owner may remain liable for all damages.  Likewise, if the person was a particularly bad driver – someone with a history of drunk driving convictions, for example – and the owner was aware of this driving history, then the owner may remain liable for all damages under the “negligent entrustment” doctrine.

One category of damages that a vehicle owner (and his/her liability insurance company) will not be responsible for, however, is punitive damages assessed against the negligent driver.  Since these damages are meant to punish the reprehensible behavior of the driver specifically, a vehicle owner will not be responsible for satisfying an award of these damages.

Another place to look for bodily injury liability insurance coverage is to the employer of a negligent driver under the legal doctrine of “respondeat superior.”  Respondeat superior is a Latin phrase (and lawyers do love their Latin) that means, roughly, “Let the master answer.”  This is a legal theory that places liability with a negligent driver’s employer if that driver causes injuries and damages in a motor vehicle accident while “in the course and scope” of their employment.

Many complications can define when an employee is or isn’t “in course and scope,” from the “coming and going” rules that identify whether an employee on their way to work or on their way home is or is not “in course and scope,” to situations during their lunch breaks, to doing “favors” for their employers when apparently off-the-clock.  Essentially, however, it means that an employer is legally responsible for injuries and damages caused by their negligent employees during the time that the employees are on the job.  So, if a negligent driver causes a motor vehicle accident while on the job, that driver’s employer and the employer’s liability insurance will very likely come into play.

California (and many other states) make use of the legal doctrine of “comparative negligence,” which essentially states that multiple people may be responsible for an accident and for any injuries and damages that result from it.  Sometimes comparative negligence applies when the person who was injured did something themselves that helped to cause the incident in which they were injured.  In this type of situation, an award or verdict would be reduced by the percentage of fault that a jury or arbitrator finds to lie with the injured person himself or herself.  If the victim is found to be 25% “comparatively negligent,” for example, then their final award or verdict would be reduced by 25% in amount.

More often, however, comparative negligence is seen in situations where more than one negligent driver has caused injuries to a specific victim.  For example, if Driver A is stopped in traffic and is rear-ended by Driver B (resulting in injuries to Driver A), and then Driver B is rear-ended by another negligent person – Driver C – which pushes Driver B’s vehicle into a second impact with Driver A (resulting in more injuries to Driver A), then both Driver B and Driver C are responsible for Driver A’s injuries.  Sometimes, for convenience, the insurance companies for Drivers B and C in this type of situation may simply accept 50/50 liability, or they may work it out later between themselves.  But in many situations, it becomes a matter of proof to determine who is liable for what percentage of the damages.

Now imagine a much more complicated situation.  Many of us have probably heard of major highway accidents that occur when visibility is suddenly, and unexpected reduced – fog, heavy rain, snow, or even sandstorms can cause visibility to suddenly drop, however many drivers may continue forward negligently at unsafe speeds.  An initial collision may block the roadway, and then quickly dozens of additional impacts may result behind it.  Determining who may be legally liable for which of many impacts and injuries that may have occurred in a situation like this can be terribly complicated, require extensive police investigations, expert accident reconstruction work, and so forth.

Finally, consider that each of the vehicles in a multi-vehicle accident like this may have more than one policy of liability insurance that applies – one for the driver, perhaps another for the owner, maybe another for an employer, and so forth, and identifying the relevant insurance policies becomes enormously complicated.  Or in other situations, where a negligent driver – or their vehicle’s owner or their employer – does not cooperate in providing information about available policies, employment status, etc., it may require a great deal of investigation on the part of an experienced personal injury attorney to identify all the third-party liability policies that may provide coverage for a client’s injury claims.  Doing this investigative work may involve consulting online databases, hiring private investigators, or using search services that specialize in finding insurance policies.  But it’s all necessary to protect the client’s interests by finding all the third-party liability coverage that’s available.

For information on the coverages you should have on your insurance policy, see the links below:

• Collision 
• Comprehensive
• Gap 
• Liability
• Medical payments (med-pay)
• Umbrella insurance
• Uninsured motorist (UM)
• Underinsured motorist (UIM)

And see below for more on insurance companies and their claim tactics:

• Dirty Tricks Insurance Companies Play in Accident Claims 
• How an Injury Attorney Deals with Insurance Company Tactics
• Insurance Industry and Individual Companies: Huge and Hugely Profitable

Image by aymane jdidi from Pixabay 

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