A proposed bill in the Minnesota state legislature would enable a party who claims to have been personally injured to name not only the person alleged to have negligently injured the claimant, but also the person's liability insurer, making them both party defendants in any lawsuit.

The Minnesota Trial Lawyers, the main outside proponent of the bill, is seeking to obtain the legal right to name a liability insurance company as a direct additional party defendant in any lawsuit wherein personal injuries and damages are claimed. The proposed laws are called “direct-action” laws because they allow direct suits against insurers in such instances. Only two states currently have such direct-action statutes: Wisconsin and Louisiana.

The final three sections of the proposed law provide that an insurer must act in good faith in connection with any matter involving an insurance policy. First, an insurer is deemed to be acting in bad faith if it delays or denies benefits (offered or paid) without an objectively reasonable basis for its offer, delay, or denial. Second, if the insurer engages in any fraud, false pretense, false promise, misrepresentation, misleading statement, or deceptive practice on which others rely involving a claim, then it could be argued that the insurer is acting in bad faith.

If there is a violation of the proposed law by an insurer, the bill stipulates that the insurer would be “liable for costs, damages, and reasonable attorneys' fees.”