The Louisiana Legislature recently made substantial changes to the Louisiana Direct Action Statute, which is codified at Louisiana Revised Statute § 22:1269.

Effective August 1, 2024, and pursuant to Act 275 of the 2024 Regular Legislative Session, the new law substantially limits the right of an injured person to sue another party’s insurer and to make the jury aware of the presence of insurance. Among the changes are the following:

Limitation of Plaintiffs’ Right of Direct Action

Prior law allowed the plaintiff a right of direct action against insurers at their choice, with very few restrictions. The plaintiff could file suit against the insured and its insurer. Under the new law, a plaintiff can only sue an insurer when one of at least one of seven exceptions applies:

  1. The insured files for bankruptcy,
  2. The insured is insolvent,
  3. Service of citation or other process has been attempted without success or the insured defendant refuses to answer or otherwise defend the action within one hundred eighty days of service,
  4. A tort cause of action exists between children and their parents or between married persons,
  5. The insurer is an uninsured motorist carrier,
  6. The insured is deceased, or
  7. The insurer issues a reservation of rights or coverage denial (but only for the purpose of establishing coverage).

This change will benefit insurers because the new law limits a plaintiff’s right of direct action against an insurer.

Preventing Disclosure of Insurance Coverage

Act 275 also provides that even when a plaintiff has a right of direct action against an insurer, the insurer should not be included in the lawsuit caption.

The Act also prohibits disclosing the existence of insurance coverage to a jury during the initial trial and any subsequent trials following an appeal.

Under prior law, the court was allowed to read instructions to the jury explaining that insurance coverage existed.

Interruption of Prescription

Under new law, filing an action against the insured shall interrupt prescription as to all insurers whose policies provide coverage for the claims asserted, even if the insurers are not included in the action.

Joinder of Insurers

If one of the seven scenarios do not apply to allow direct action against an insurer, the insurer may still be joined as a defendant by either party. The insurer should be joined at the time a judgment is to be entered or a settlement is reached. The joinder is subject to the terms and limits of the policy if the insurer denied coverage or reserved its rights at least thirty days before trial. The insurer can be given notice of the proceeding with the first responsive pleading filed on behalf of the insured defendant or by service of the citation by any method of service on a defendant provided by law.