Casualty insurance covers loss or liability arising from accident or mishap, excluding those falling  under types of insurance as fire o...

Casualty insurance covers loss or liability arising from accident or mishap, excluding those falling  under types of insurance as fire or marine. (Sec.  174)   

The following are the two  divisions  of  casualty  insurance :
1.     Accident or health insurance – Insurance against specified perils which  may affect the person and/or property  of the insured.    E.g.  personal  accident,  robbery/theft  insurance 
2.     Third  party  liability  insurance  – Insurance against specified perils which  may give rise to liability on the part of  the  insured  of  claims  for  injuries  or  damage to property of others.

some rules on “third party liability  insurance”
1.     Insurable  interest  is  based  on  the  interest of the insured in the safety of  the  persons,  and  their  property,  who  may maintain an action against him in  case  of  their  injury  or  destruction  respectively.   
2.     In a third party liability (TPL) insurance  contract,  the  insurer  assumes  the  obligation  by  paying  the  injured  third  party  to  whom  the  insured  is  liable.  Prior  payment  by  the  insured  to  the  third person is not necessary in order  that  the  obligation  may  arise.  The  moment the insured becomes liable to  third persons, the insured acquires an  interest in the insurance contract which  may be garnished like any other credit.   
3.     In  burglary,  robbery  and  theft  insurance,  the  opportunity  to  defraud  the insurer (moral hazard)  is so great  that insurer have found it necessary to  fill  up  the  policies  with  many  restrictions  designed  to  reduce  the  hazard. Persons frequently excluded are  those  in  the  insured’s  service  and  employment.  The  purpose  of  the  exception  is  to  guard  against  liability  should  theft  be  committed  by  one  having  unrestricted  access  to  the  property.
4.     Right of third party injured to sue the  insurer  of  party  at  fault  depends  on  whether  the  contract  of  insurance  is  intended to benefit third persons also  or only the insured 

Under these instances the injured person have the right  to sue insurer of the party at fault:
1.     Indemnity against third party liability – injured third party can directly sue the  insurer. The purpose is to protect injured person against  the insolvency of the insured who causes  such injury.
2.     Indemnity  against  actual  loss  or  payment – third party has no cause of  action  against  the  insurer.  The  third  person’s  recourse  is  limited  to  the  insured alone. The contract is solely for  the insurer to reimburse the insured for  liability actually satisfied by him.

It must be noted that the  insurer  is  not  solidarily  liable  with  the  insured. The insurer’s liability is based on contract;  that of the insured is based on torts. Furthermore,  the insurer’s liability is limited by the amount of the  insurance coverage.

Liability insurance is a contract of indemnity  for the benefit of the insured and those in privity  with him, or those to whom the law upon the  grounds of public policy extends the indemnity  against liability.

Liability of the insurer and that of the insured in case for indemnity against third person liability:
1.     Insurer’s liability is direct but  the  insurer  cannot  be  held  solidarily  liable  with  the  insured  and  other parties at fault.   While the liability of the insured is direct and can  be held liable with all the  parties at fault. 
2.     Insurer’s liability  is  based  on  contract. Whereas the liability of the insured is based on tort.
3.     Insurer’s third‐party liability is only up to the extent of the insurance policy  and  that  required  by  law. On the other hand, the liability of the insured extends to  the amount of actual and  other damages. (Heirs of George Y. Poe v. Malayan Insurance Company,  Inc.  G.R. No. 156302, Apr. 7,  2009) 

“no action” clause
It  is  a  requirement  in  a  policy  of  liability  insurance  which  provides  that  suit  and  final  judgment be first obtained against the insured,  that  only  thereafter  can  the  person  injured  recover on the policy. (Guingon v. Del Monte, G.R.  No. L‐21806, Aug. 17, 1967)   

A  “no  action”  clause  must  yield  to  the  provisions  of  the  Rules  of  Court  regarding  multiplicity of suits. (Shafter v. RTC, G.R. No. 78848,  Nov. 14, 1988)  

The author takes no responsibility for the validity, correctness and result of this work. The information provided is not a legal advice and it should not be used  as a substitute for a competent legal advice from a licensed lawyer. See the disclaimer

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