In the case of Bloomer v. Liberty Mutual Insurance Co., 1979, the U.S Supreme Court was asked to determine whether an insurance company could be held liable for injuries sustained by a third party due to their insured's negligence. The plaintiff, Bloomer, had been injured in a car accident caused by one of Liberty Mutual's policyholders and sought compensation from both the driver and his insurer. However, under Michigan law at that time, insurers were not directly responsible for damages caused by their policyholders' negligent actions unless there was some contractual obligation or statute making them so. The court ruled in favor of Liberty Mutual Insurance Company stating that it did not have any direct liability towards Bloomer as there was no such contractual obligation or statute present which would make them directly accountable for their insured’s negligent acts causing injury to others. This ruling upheld the principle that an insurance company's duty is primarily towards its policyholder rather than third parties affected by said policyholder’s actions.

In the dissenting opinion for Bloomer v. Liberty Mutual Insurance Co., the justice argued that the majority's decision to uphold a lower court ruling, which found in favor of an insurance company denying coverage based on policy exclusions, was incorrect. The dissenting view held that these exclusions were not clearly defined or explained to the policyholder and thus should not be used as grounds for denial of coverage. Furthermore, it was argued that such ambiguities in insurance contracts should be interpreted in favor of the insured party rather than benefitting large corporations like insurance companies who have greater resources and expertise at their disposal when drafting these policies. This interpretation would better align with public interest by providing more protection to individual consumers against potential abuses by powerful corporate entities.