The insurer’s liability under compulsory third-party liability insurance

Under a compulsory third-party liability policy, the insurer covers, up to the sum insured specified in the contract, the insured’s liability for pecuniary and non-pecuniary harm caused to third parties. The insurer discharges that liability by paying compensation to the injured party for all pecuniary and non-pecuniary damage directly and immediately resulting from the injury, as well as default interest where the insured is liable to the injured party for that interest. The Bulgarian Insurance Code gives the injured party a direct action against the liability insurer of the person who caused the harm. The insurer’s liability depends on that person’s liability and as a rule is coextensive with it. For the insurer to be liable, valid liability insurance covering the person who caused the harm must have been in force at the time of the injury. In addition, all the conditions under Article 45 of the Obligations and Contracts Act for the insured’s liability to the injured party must be met. Compensation requires proof of harm caused by a culpable and unlawful act of the insured, a causal link between the act and the harmful outcome, and the nature and extent of the damage sustained.

This article does not provide a legal opinion or advice about any particular person or situation. For assistance with a similar case, consult a lawyer practising in insurance law.