This imposition of vicarious liability was with a legislative intervention concerning automobile liability insurance. In the Car insurance Act, adopted included in the Insurance Act generally in most provinces, certain features were imposed upon all automobile liability policies.
Particularly, insurers was required to agree to provide cover against liability imposed for legal reasons upon the insured named within the contract each other person who with his consent personally drives an automobile owned by the insured for loss or damage, as a result of the ownership, use or operation with the motor vehicle. How to spend more and save less – additional resources
This provision addressed the difficulty posed by the normal law element privity of contract which had caused the Privy Council to deny the claim for indemnity through the daughter of the named insured owner within liability policy. More generally, it ensured that, the location where the owner did have liability insurance, its proceeds were available as compensation to get a third party injured or else caused loss from the negligent operation from the insured vehicle. Put simply, it made compensation more widely available.
An especially significant statutory modification of common law contract rules was obviously a provision giving a hurt third party an immediate right of action from the insurer of the baby – the automobile owner – primarily liable. Unlike the direct action provided 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 from the invalidity of the policy arising, for example, from a material non-disclosure. Although the insurer may, in a few circumstances, claim reimbursement in the insured, the clear reason for this provision was, and is, to make money available to injured victims. To have this benefit victims must have a tort claim from the insured, but any contractual impediments related to the insured’s rights from the insurer usually do not prevent recovery.