Third-party insurance is liability coverage purchased by you (first party) from an insurance carrier to protect against claims from other people (third party) for damage or injuries you cause. This coverage typically comes packaged in auto, homeowners, renters, and business insurance policies to protect against common risk exposures.
How Third-party Insurance Works
Third-party liability insurance covers claims that you, a family member, or your employee caused someone else’s physical harm. If you cause third-party injury or property damage, there’s a chance you might be sued for hefty damages. This is true if an incident takes place in your home or your business, or with your car.
