11 Feb

Third-Party Liability

Third-Party Liability, also known as Public Liability is an insurance policy purchased for protection against the actions of a third party who are not party to the contract of insurance and are not employees of the insured. It is purchased by the insured (the first party) from an insurance company (the second party) for protection against damage from the actions of another party (a third party).

Liability insurance is designed to offer specific protection against third-party insurance claims, i.e., payment is not typically made to the insured, but rather to someone suffering loss who is not a party to the insurance contract. In general, damage caused intentionally as well as contractual liability are not covered under liability insurance policies. When a claim is made,^[1] the insurance carrier has the duty (and right) to defend the insured.

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