ABSTRACT
Liability insurance protects the assured against claims by third parties. Payment under a liability policy becomes due when the third party has established both the liability of the assured and the quantum of damages payable by the assured, and that is the point at which the limitation period for an action against the insurers is deemed to accrue. Two separate public policy rules may preclude recovery by an assured under a liability policy. The compulsory insurance requirement is in respect of any motor vehicle, defined as a mechanically propelled vehicle intended or adapted for use on roads excluding invalid carriages, lawn mowers and electrically assisted pedal cycles. The Third Parties Act 1930 was originally passed to supplement the introduction of compulsory motor insurance by the Road Traffic Act 1930, and confers on a third party a right of action against the liability insurers of an assured who is unable to satisfy a judgment in favour of the third party.
