Court Orders Insurer to Pay CNY 100,000 to Injured Third Party
A court in Southern China City has ruled that an insurance company must pay CNY 100,000 under a commercial third-party liability policy to a man who was thrown from a vehicle and then struck by the same car. The plaintiff, Mr. Mo, sustained severe injuries and permanent disability in the 2008 accident. The court determined that he was a third party under the policy and that the insurer could not deny coverage based on his initial status as a vehicle occupant.
The accident occurred on 9 October 2008 when Mr. Mo, an employee of a state-owned bank, was traveling with a colleague to inspect bank branches in rural towns near Southern China City. The driver, Mr. Yu, lost control of the vehicle. Mr. Mo was ejected from the car and then hit by the same vehicle, causing him to suffer a grade-one disability. His total losses were calculated at CNY 360,420. A previous final judgment had already ordered the insurer to pay CNY 120,000 under the compulsory motor vehicle insurance and had confirmed that Mr. Mo was a third party. That judgment did not address the commercial third-party insurance coverage of CNY 100,000 held by the bank as the policyholder.
At trial, Mr. Mo presented evidence including the prior judgment, the insurance policy, and a written request to the bank to claim the commercial insurance payment from the insurer. The bank, named as a third party in the case, did not respond to the request. The insurer argued that Mr. Mo was a vehicle occupant and thus not covered by third-party insurance, and that he had no right to sue the insurer directly. The court heard testimony and reviewed the policy documents. The bank’s representative stated that the matter was a dispute between the plaintiff and the insurer and that the bank had no stake in the outcome.
The court found that the prior judgment had already established Mr. Mo as a third party. The bank, as the insured party, had failed to claim the commercial insurance proceeds despite Mr. Mo’s request, which constituted a clear case of inaction. According to the court, the policy was a valid contract between the bank and the insurer. The loss fell within the coverage scope, and the insurer was liable to pay. The court rejected the insurer’s arguments, noting that they contradicted the binding legal findings of the earlier judgment.
Under Article 65 of the Insurance Law, a third-party beneficiary may directly demand payment from the insurer when the insured party is idle in exercising its claim. The court also cited Article 73 of the Contract Law, which allows a creditor to exercise the debtor’s rights if the debtor neglects to do so. The evidence showed that the bank had been requested to claim the CNY 100,000 but had not acted. The court therefore held that Mr. Mo had standing to sue the insurer directly. The insurer’s defense that Mr. Mo was a vehicle occupant was inconsistent with the earlier judicial determination and with the policy’s purpose of protecting innocent third parties.
The court ordered the insurer to pay Mr. Mo CNY 100,000 in insurance proceeds, plus half the court costs. This case reinforces the principle that insurers cannot rely on technical distinctions when a prior judgment has classified the injured party as a third party. It also highlights that policyholders who fail to pursue a claim may trigger a direct right of action for the victim. The decision underscores the importance of timely claims processing by all parties involved.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.