Definition of Third Party Insurance

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When it comes to insurance, there's typically three parties that you are looking to cover. Get a definition of third party insurance with help from an expert at Combs & Company in this free video clip.

Part of the Video Series: Insurance Questions Answered
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Video Transcript

Hi, my name is Susan Combs, and today we're going to talk about third party insurance liability. When it comes to insurance, there's typically three parties that you are looking to cover. You have the primary coverage or the primary liability which is yourself and you are the person that's actually buying the insurance. It can be yourself personally or it can be the company that you own and then you have secondary which is actually the insurance company that is picking up this risk and then sometimes you have third party liability where you are assigning the risk that you are purchasing onto a third party. Prime example is say you are a catering company and you are renting out a hall, so you have your insurance, the insurance carrier is covering you but then you are extending your liability over to the hall so that if there is a trip and fall or somebody gets sick that's actually attending the event than you insurance is going to cover them. So the main thing to understand is you know, policies can be very very different. You know some policies will just automatically cover a third party as long as there is an insurable interest at no charge and then sometimes it will actually cause you know, charge you a fee to do this. So the best thing to do is to talk to your broker and understand your policy and know if there is going to be any additional costs if you need to add on somebody as a third party liability.

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