This imposition of vicarious liability was with a legislative intervention associated with automobile liability insurance. In the Automobile Insurance Act, adopted within the Insurance Act in many provinces, certain features were imposed upon all automobile liability policies.
Particularly, insurers was required to agree to provide cover against liability imposed legally upon the insured named within the contract each other person who together with his consent personally drives an automobile owned by the insured for loss or damage, arising from the ownership, use or operation of the motor vehicle. How to spend more and save less - check this out
This provision addressed the difficulty posed by the most popular law element privity of contract which had caused the Privy Council to deny the claim for indemnity through the daughter of a named insured owner under a liability policy. More generally, it ensured that, in which the owner did have liability insurance, its proceeds were available as compensation for any third party injured or otherwise caused loss with the negligent operation of the insured vehicle. Quite simply, it made compensation extensively available.
An especially significant statutory modification of common law contract rules would be a provision giving a wounded third party an immediate right of action from the insurer of the person – usually the automobile owner – primarily liable. Unlike the direct action available with respect to non-automobile liability insurance, the right of action in automobile cases is not prejudiced by the insureds violation with the law or policy terms, or through the invalidity of the policy arising, for instance, from a material non-disclosure. Although the insurer may, in certain circumstances, claim reimbursement from your insured, the clear reason for this provision was, and it is, to make money accessible to injured victims. To have this benefit victims must still need a tort claim up against the insured, but any contractual impediments related to the insured’s rights up against the insurer usually do not prevent recovery.