Direct Action Insurer: Direct Claim against Liability Insure

# Direct Action Insurer: Direct Claim against Liability Insurer As an injured party, you have the right under certain circumstances to directly address the insurer of the liable party. This right is called the **direct action** and is statutorily regulated in article 7:954 of the Dutch Civil Code. This option provides important protection for victims of damage. ## What is a Direct Action against the Insurer? A direct action against the insurer is the right of an injured party to directly institute a claim with the liability insurer of the damage causer, without the intervention of the insured itself. This means that as a victim, you can address not only the damage causer but also directly their insurer. This right is laid down in **article 7:954 paragraph 1 DCC**: The injured party has its own right to payment vis-à-vis the insurer up to the amount of the insured sum. This provision gives you as an injured party an independent claim right that is separate from the insured. ### Why is the Direct Action Insurer Important? The direct action offers various benefits for injured parties: - **Better certainty of payment**: Insurers generally have more financial capacity than individuals or small businesses - **Faster handling**: You do not have to wait for the liable party to compensate the damage - **Protection in case of bankruptcy**: Even if the insured goes bankrupt, your claim against the insurer remains - **Direct negotiation**: You can directly discuss damage compensation with the insurer ## Statutory Basis: Article 7:954 DCC Article 7:954 DCC forms the legal basis for the direct action. The main provisions: **Paragraph 1**: The injured party has its own right to payment vis-à-vis the insurer up to the amount of the insured sum. **Paragraph 2**: The insurer may invoke the same defences against the injured party as against the insured, with the exception of defences relating to the insured's non-compliance with obligations towards the insurer. **Paragraph 3**: In the event of bankruptcy or suspension of payments of the insured, the injured party may still exercise its claim against the insurer (separatism). ### Scope of the Direct Action The direct action applies to various types of liability insurances: - **Motor vehicle liability insurance** (mandatory motor vehicle liability insurance) - **Business liability insurance** (AVB) - **Professional liability insurance** - **Private liability insurance** (AVP) - **Product liability insurance** ## Conditions for a Direct Action Insurer To successfully institute a direct action against the insurer, various conditions must be met: ### 1. Liability of the Insured There must be liability of the insured for the damage incurred. This means you must be able to demonstrate that: - The insured has committed a tort (article 6:162 DCC) - There is contractual liability - Statutory liability exists (e.g., risk liability) ### 2. Valid Insurance Contract A valid liability insurance must exist that covers the damage. Check whether: - The insurance was in force at the time of the damage-causing event - The damage-causing event falls under the policy coverage - The insured has paid its premiums - No exclusion grounds apply ### 3. Coverage under the Policy The damage must fall within the coverage of the insurance agreement. Note: - Insured amounts and maxima - Exclusions in the policy conditions - Deductibles - Territorial limitations ## Practical Examples of Direct Action ### Example 1: Traffic Accident You are hit by a motorist who runs a red light. You suffer whiplash complaints and your car is a total loss. Instead of personally addressing the driver, you can directly file a claim with their motor vehicle liability insurer. The insurer is obliged to compensate your damage up to the insured amount. ### Example 2: Workplace Accident A plumber causes water damage during work in your home by damaging a pipe. You can directly address the business liability insurer of the plumbing company, without first having to summon the company itself. ### Example 3: Professional Error by Lawyer Your lawyer makes a mistake as a result of which you lose a case and suffer significant damage. You can directly address the professional liability insurer of the lawyer for compensation of your damage, even if the law firm has since gone bankrupt. ### Example 4: Product Liability A defective product from a manufacturer causes damage. Even if the manufacturer itself is no longer solvent, you can address the product liability insurer via direct action. ## Defences of the Insurer in Direct Action The insurer may defend against your direct action with the same arguments it could also raise against the insured, such as: - **No liability**: The insured is not liable for the damage - **Exclusions**: The damage falls under an exclusion ground in the policy - **Limits**: The damage exceeds the insured amount - **Causality**: There is no causal connection between the conduct and the damage **Important**: The insurer **cannot** invoke defences that exclusively relate to the relationship with the insured, such as: - The insured has not reported the damage - The insured has overdue premium payments - The insured has breached its duty of disclosure These internal defences cannot be invoked against you as an injured party. ## Comparison: Direct Action vs. Indirect Claim | A