Residents of Grand Prairie, Arlington, Grand Prairie, Mansfield, Cedar Hill, De Soto, Duncanville, Dallas, Fort Worth, Burleson, and other places in Texas may need an attorney to tell them who has rights under an insurance policy. For the best and most informative information an experienced Insurance Lawyer needs to be consulted.
So, who can recover on an insurance policy?
Of course, the named insured, as a party to the insurance policy, may file a lawsuit on the policy. Obviously, someone named as a beneficiary may also enforce the contract with the insurance company. This was stated in a Texas Supreme Court in 1967, in the case, McFarland v. Franklin Life Insurance Company.
Sometimes questions arise over who else may, and may not, sue on the insurance contract. An insurance policy is a personal contract between the insurance company and the insured. A stranger to the insurance contract may not sue on the policy. This was stated in a Texarkana Civil Appeals case in 1972, styled, Doss v. Roberts. In this case the court ruled that a joint owner of property was not entitled to proceeds from an insurance policy bought by other joint owners.
However, “additional insureds” and “additional named insureds” are entitled to sue under an insurance policy contract.
An additional insured is a party protected under an insurance policy, but who is not named within the policy. A common example of an additional insured is a person who, although not specifically named, is covered under a liability policy by a definition of “insured” that extends protection to interests, strictly according to a status, such as employees or common members of a household. On the other hand, an additional named insured is a person or entity specifically named in the policy as an insured subsequent to the issuance of the original policy. A party typically becomes an additional named insured to add the additional named insured to the named insured’s pre-existing insurance policy. This was discussed in an Austin Court of Appeals case in 1997, styled, Western Indemnity Insurance Company v. American Physicians Insurance Exchange. Here a doctor was an additional insured under the policy extending coverage to “physician providing medical professional services under a contract of employment with the named insured.”
Other persons who may sue for benefits under the insurance contract are “intended beneficiaries,” also known as “third party beneficiaries.”
A third person for whose benefit a contract is made may enforce the contract against the promissor. The controlling factor in determining whether a third party may enforce a contract is the intention of the contracting parties. This is discussed in a Houston [14th Dist.] Court of Appeals case from 1985, styled Hermann Hospital v. Liberty Life Assurance Company.
A presumption exists that parties intended to contract only for themselves, so the contract will not be construed as having been made for the benefit of another, unless it clearly appears that this was the intention of the contracting parties. Any doubts are construed against such an intent. This was the decision by the United States 5th Circuit Court of Appeals in 1997, in the case, Marine Indemnity Insurance Company of America v. Lockwood Warehouse & Storage.
Here is what needs to be proved to qualify as a third party beneficiary according to the same 5th Circuit Court in the case, Palma v. Verex Assurance., Inc.
1) that the purported third party beneficiary was not privy to the written agreement;
2) that the contract was made at least in part for the third party’s benefit; and 3) that the contracting parties intended for the third party to benefit from their written agreement.
All of this can be confusing and that why experienced legal help should be sought.
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