What is a Third Party Liability Claim?
It is important to understand what a third party liability claim is so you will know when an accident or injury on your business premises or to an employee of your business is the responsibility of that third party's insurance plan. There are many things your general liability business insurance coverage protects your business against. But, there are some instances where paying for any damages or injuries will not be handled by your insurance company through your policy.
Determining a Third Party's Responsibility
Generally, a third party claim is one where an injury or accident is caused by that third party. For example, an employee of yours was injured while using machinery manufactured by another company. The machinery's defectiveness was the fault of the manufacturer and was what led to the injury. In an instance like this the manufacturer would be the third party responsible for handling the damages or injuries through their insurance coverage.
You would need to report the details of the accident to proper authorities for documentation or possible insurance investigation purposes and check your post claim coverage status which is sometimes part of processing any claim. However, you would not want to file a claim directly with your insurance company as the injury was not caused by anyone or any thing directly connected to your business. If the machine had been one your company manufactured and made use of while conducting business, you would want to file a claim with your insurer.
Anyone who is not a part of your company who injures anyone who works at your company can be considered a third party in an insurance sense. Another example would be an instance where an employee is driving the company car. The employee is involved in an accident that causes damage to the car requiring contact with an insurance company. However, it would not be your responsibility to file a claim with your insurance company. The third party who caused the accident would need to file a claim and any damages would be remedied to you by way of that person's insurance.
If your employee was injured while working in your office because he or she slipped on a wet floor your janitor failed to warn people about, this would be something that your coverage would need to cover. This is because your company retains the janitor's services and therefore, despite the janitor seeming like a third party, he is not. This is because your company has hired him to perform the work and he has a direct affiliation with you.
There are many particulars which apply to these types of claims. This is why it is wise to know ahead of time what makes a third party claim the best route to take. There may be information you will be asked to provide, or the employee will be asked to provide, in order for the third party's insurance claim to be fully processed.
Handling Third Party Claims
Many specific laws pertaining to third party claims differ from one area to another. Before an incident arises it is important to check with your insurance company in order to determine what specifics of any particular incident would make it one that needs to be handled through a third party's insurance plan. At the very least, understanding what third party liability claims are can help you identify situations where you know, after an upsetting incident, that your business insurance plan will not be needed in order to pay for damages caused to an employee of your company.
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