This imposition of vicarious liability was with a legislative intervention associated with 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.
In particular, insurers was required to agree to provide cover against liability imposed by law upon the insured named inside the contract and every other person who together with his consent personally drives a car owned by the insured for loss or damage, as a result of the ownership, use or operation from the motor vehicle. How to spend more and save less - check this out
This provision addressed the issue posed by the normal law dependence on privity of contract which had caused the Privy Council to deny the claim for indemnity by the daughter of a named insured owner within a liability policy. More generally, it ensured that, where the owner had liability insurance, its proceeds were available as compensation to get a third party injured or otherwise not caused loss with the negligent operation from the insured vehicle. Quite simply, it made compensation more widely available.
An especially significant statutory modification of common law contract rules would be a provision giving a wounded third party a direct right of action up against the insurer of the individual – the automobile owner – primarily liable. Unlike the direct action available with respect to non-automobile liability insurance, the right of action in automobile cases just isn’t prejudiced by the insureds violation from the law or policy terms, or by the invalidity of the policy arising, as an example, from a material non-disclosure. Although the insurer may, in some circumstances, claim reimbursement from the insured, the clear reason for this provision was, and is also, to make money accessible to injured victims. To have this benefit victims must still have 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.