Third party insurance refers to any type of liability insurance policy that a company or person (first party) purchases from an insurer (second party) to protect themselves from claims made by another person (third party). The third party is a party that is not related to your company, but that comes into contact with it in some way. It can be a customer, partner, supplier, distributor, or any other entity that interacts with your company but is not otherwise associated with it. A third party is a person who is not related to your company.
Therefore, liability insurance protects your company from lawsuits, claims, and damages when a third party is injured at your workplace. A liability plan could be included in a plan for business owners (BOP) that includes general liability, commercial property, and sometimes business interruption service. Every day, there are customers, contractors, and people who aren't employees who can interact with your company. Basically, a third party is a legal term that represents a person affected by the actions of a company but is not directly related to the company itself.
Any insurance issue involving members of your staff would not be covered by a liability policy. As with all insurance policies, the cost will be determined by the type of business you run and the amount of coverage you think you'll need. If your company damages the property of a third party or a third party is involved in a slip and fall accident at your workplace and files a claim against your company, third-party insurance will protect you and cover legal costs and other potential damages. If your company has direct contact with customers and customers every day, is engaged in the shipping and distribution of products, or provides services that may affect others, you'll need some form of third-party insurance.
This is especially true if you live in a state that is known to favor plaintiffs over small businesses in a court of law. If an accident occurs and a third party is injured, the company can be held responsible for all expenses associated with the accident. Assuming you've insured your small business with a million-dollar liability coverage and your medical bills and legal defense (including judgments and settlements) exceed one million dollars, you'll only owe any balance that exceeds your policy limit. Each Merchant Maverick staff evaluator is a subject matter expert with experience researching, testing and evaluating software and services for small businesses.
When you're ready to make a purchase, there are quite a few places to get a general liability policy for your business. Commercial or business auto insurance includes liability insurance to protect your business from these out-of-pocket costs. One of the most basic types of business insurance you can buy to protect your business is liability insurance.