The 2010 Act has now been updated by regulations The Third Parties (Rights against Insurers) Regulations 2016 (“the Regulations”) which extends the circumstances in which the previous governing statute (“ Act”) applies to corporate and other bodies that are subject to specified insolvency regimes or, have been dissolved are now included.


The purpose of the legislation is to protect the interests of an insured who is required to meet a third parties claim when insolvent/bankrupt and no longer in control of their assets.

To trigger the Act an insured must both:

  • incur a liability to a third party against which it is insured; and
  • be or become a “relevant person” (bankrupt/insolvent)

The Regulations extend the provisions of the Act to include other corporate entities and vehicles (sole practitioners/charities etc.) so long as they are continuing to trade and/or if dissolved the Company have been restored in order to afford policy response.

The aim of these Regulations is to require both the public and charitable sector(s) to respond in the same manner as the private sector did under the Act.

It remains to be seen what the real costs and benefits of this change will be generating only a small net benefit to business (mainly insurers and claimants) of than £1 million per annum.

It is also not clear people who will be affected or the extent to which people chose to benefit from the improvements made by the 2010 Act.

The Act will finally come into force on 1 August 2016.

The regulations can be viewed by following this link http://www.legislation.gov.uk/uksi/2016/570/contents/made

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