Article: O.-J. Luik, J. Lahe, "Granting Direct Claim Rights in Voluntary Liability Insurance to the Aggrieved Person in Estonian Insurance Practice: Via Insurance Contract Vs Claim Assignment", in: Revisiting the Limits of Freedom While Living Under Threat. II, Riga: University of Latvia Press 2024, pp. 196–206. DOI: 10.22364/iscflul.9.2.17 (published 2024)
Co-author: Janno Lahe.
Research question
Under the Law of Obligations Act (võlaõigusseadus, VÕS), the injured party may claim directly against the insurer only in compulsory liability insurance (VÕS § 521). There is no statutory direct action in voluntary liability insurance. The article examines how Estonian practice fills that gap and whether a statutory direct claim would be preferable.
Main arguments
Two routes are used: a term in the policy granting the injured party a direct claim, or an assignment of the policyholder's claim to the injured party. Both have drawbacks, and the authors weigh the advantages and disadvantages of a statutory direct claim. The abstract does not state a final preference.
Relevance for insurers
For foreign liability insurers covering Estonian risks, the key questions are whether a third party can sue the insurer directly and which defences survive. On assignment, the insurer generally retains the defences it had against its policyholder. The law has not changed on this point since publication. See the VÕS on Riigi Teataja.