On behalf of our members that make NJBIA the largest, most impactful association representing New Jersey job creators, I write to you in opposition to Senate Bill No. 4499, which would require that insurance companies be named as the sole defendants in liability cases involving their insured clients. NJBIA respectfully opposes this legislation because it fundamentally alters established legal norms in liability cases, leading to increased litigation, higher costs, and unintended consequences for policyholders.
Traditionally, liability claims are directed at the individuals or entities alleged to be at fault, with insurance companies providing defense and indemnification as stipulated in their policies. Mandating that insurers be named as the sole defendants deviates from this norm, potentially leading to confusion and undermining the foundational principles of tort law.
By positioning insurers as primary defendants, the bill may encourage more lawsuits, as plaintiffs might perceive insurers as having deeper pockets. This shift could lead to increased legal costs, which may ultimately be passed on to consumers through higher premiums.
This bill could complicate the claims process, as insurers may face direct litigation even in cases where liability is clear and settlements are typically straightforward. This added complexity could delay resolutions and strain judicial resources.
While we understand the intent behind S-4499 to enhance transparency in liability cases, we believe that the bill may lead to unintended negative consequences for both insurers and policyholders. We respectfully urge the committee to vote “NO” and to engage with industry stakeholders to explore alternative solutions that address the underlying concerns without disrupting established legal and insurance practices.
