What is third-party liability?

Third-party liability refers to a type of insurance that involves three parties:

• First party: the person or entity that purchases the insurance coverage
• Second party: the insurer
• Third party: the person or entity that files a claim

Third-party liability is most often seen in the automobile insurance industry. It offers coverage that will protect against some type of claim of loss by a driver who doesn’t have insurance or is not covered in the policy. The driver who is found to be at-fault is the third party.

There are very few states in which a driver is not required by law to carry an auto insurance policy. There are two types of third-party liability coverage within automobile insurance: bodily injury liability and property damage liability.

Bodily injury liability coverage covers the costs incurred by victims such as medical bills, lost wages and pain and suffering. Property damage liability coverage helps people to replace property that was damaged or lost in the incident.

There are a variety of limits available for third-party liability coverages. Experts recommend that the more assets a person has to protect, the higher they set their liability limits. An experienced insurance agent can help a driver determine the best type and amount of coverage.
When a person is involved in a car accident in Atlanta, a personal injury attorney can assist in dealing with insurance companies and, if necessary, filing a civil suit against the at-fault driver. Victims may be entitled to various forms of compensation.