State liability laws differ however in general if an excluded driver does operate a vehicle on the policy and causes an accident then both that driver and the car owner can be held responsible. So if the policyholder is the car owner then yes, normally he or she could be held liable to the other party.

As you are probably aware an insurance company will not extend any coverages to a driver that is excluded from the car insurance policy. So when an excluded driver operates a car they are not covered for then he or she as well as the car owner usually can be held responsible for any damages or injuries the excluded driver caused.

To find out your rights in your state if you were the innocent victim hit by an excluded driver try contacting a lawyer that deals with liability laws. You should also be able to find out your consumer rights by contacting your state's insurance regulator.