Georgia Lawmakers Approve End to Direct-Action Suits Against Trucking Insurers

A bill that would end direct-action lawsuits against trucking insurers is rolling toward the governor’s desk after it was approved by the full House of Representatives this week.

Senate Bill 426, heralded as a way to encourage more insurance carriers to write trucking businesses and to help reduce premiums, passed the House 172 to 0. The Senate in February endorsed it by a vote of 46 to 2.

Gov. Brian Kemp is expected to sign it into law after he has called for tort reforms that could limit lawsuits and large judgments against businesses in the state, the Associated Press and other news outlets have reported.

SB 426, sponsored by Sen. Blake Tillery, R-Vidalia, and others, would bar direct lawsuits against insurance companies after an accident, except when the trucking company involved has gone bankrupt or the company or the driver can’t be found.

Georgia is one of four states that allow plaintiffs to file suit and seek damages directly from the trucker’s insurance company, lawmakers have said. That has led to large jury verdicts and settlements and has caused many carriers to raise rates or end coverage, officials have said. An assistant to the Georgia insurance commissioner said in January that the current law has all but destroyed the insurance market for trucking firms, many of which are small businesses.

The current law, adopted in 1937, came about as a way to allow injured parties to be made whole if the trucking company owner or operator could not be located. But transport companies and insurers have said the law is unnecessary in today’s online world, where truckers can be tracked down.

Plaintiffs attorneys have opposed the change and have said the current law does not force insurers to pay higher damages than policy limits allow. A similar bill was approved by a Senate committee in 2023 but failed to advance.

Kemp’s broader tort-reform efforts have been put on hold, but he has said he plans to push for comprehensive changes in 2025. Georgia lawmakers capped noneconomic damages, including those for pain and suffering, in a 2005 tort-reform law, but the state Supreme Court in 2010 decreed the limits were unconstitutional.

Meanwhile, a bill that would give some protection to boat-rental businesses has seen little movement in the state Senate this month. HB 994 was approved by the House 163 to 1 in February but has been in a Senate committee since then.

The measure would absolve boat rental businesses, known as liveries, of liability as long as they maintain liability insurance coverage of at least $500,000 per occurrence. The rental place would be held liable only if it fails to ensure that the boat operator is reasonably skilled in operating the craft and is not reckless, and that the boat is in safe condition.