Third Party Insurance

Third party insurance is a type of insurance plan bought to safeguard against the claim to another.

Third Party Insurance

In this category of motor insurance, the third party will cover for the fiscal liabilities that is incurred by the owner of the car in the event of unforeseen demise or permanent disability of the third party, which was crashed by the vehicle of the policyholder in an accident, As per the Motor Vehicle Act 1988 the third party is a statutory requirement.

As per the rule, the Insurance Regulatory and Development Authority (IDRA) of India compute the damage’.

Third-party insurance is essentially a form of liability insurance purchased by an insured from a insure for protection against the claims of another (third party). The insured person is responsible for any of their damages or losses, regardless of the cause of those damages.

There are two types of third-party liability coverage:

  • First, bodily injury liability covers costs resulting from injuries to a person. These injuries costs could include the expenses like hospital care, lost wages, and pain and suffering due to the accident.
  • Second, property damage liability covers costs resulting from damages to or loss of property,

Third-party insurance significance:

Both types of third-party insurances are important, specifically for individuals, such as homeowners, with substantial assets to protect. The more money and assets an insured have, the higher the limit should be for each type of liability coverage.

Other Types of Third-Party Liability Insurance:

In few countries, third-party or liability insurance is compulsory insurance for any party that may potentially be sued by a third party.

Public liability insurance involves industries or businesses that take part in processes or other activities which may affect third parties, such as subcontractors, architects, or engineers. Here, the third-parties can be visitors, guests, or users of a facility. Most of the companies include public liability insurance in their insurance portfolio to protect against damage to property or personal injury.

Product liability insurance is typically mandated by legislation, the scale of which varies by country and often varies by industry. This type of insurance covers all major product classes or types, including chemicals, agricultural products, and recreational equipment; and protects companies against lawsuits over products or components that cause damage or injury.