The Third Parties (Rights Against Insurers) Act 2010 (“the 2010 Act”) applies where an insured person incurs a liability to another (“the third party”) and is or becomes insolvent (or within circumstances similar to insolvency) and therefore a “relevant person” within the meaning of the 2010 Act (see sections 4 to 7 of the 2010 Act). In such circumstances, the 2010 Act transfers the rights of the relevant person under the insurance contract to the third party, so that the third party can enforce those rights directly against the insurer, rather than the proceeds of the insurance policy being treated as the assets of the insured for distribution to creditors in the insolvency.
Link: The Third Parties (Rights Against Insurers) Act 2010 (Consequential Amendment of Companies Act 2006) Regulations 2018
Source: Legislation .gov.uk
