What do you mean by Third Party Insurance ?? – A Detailed Guide
What do you mean by Third Party Insurance ??, This article talks about the Third party insurance which is to be insured by the person who wants to save himself from the person who raises the claim on him or sues him. This insurance protects the person from being financially ruled off in the case to case basis. The article would also highlight the benefits and the gains that can be arrived by taking the third party insurance policy.
What is Third Party Insurance ??
Now discussing about the third party insurance, that there are mainly 2 types of insurance policy:
- First Party Insurance
- Third Party Insurance (Liability Insurance)
What does the insurance companies do is a great question which is answered here. The insurance companies indemnify the client party to any of the expenses which are incurred due to the claims raised by the other party in case of the case being ordered against the other party.
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Types of Third Party Insurance:
- First of all there is Workers Insurance where the owner of the business takes the insurance of the employees or workers of the entity, in case of any event happening to the employee than they can provide the same.
- Then comes the professional liability insurance where the business can be saved from the losses get have occurred due to the mal practice or some wrong doings of the professional persons.
- The other similar term with the professional insurance is the directors and officers liability, where losses occurred specifically due to the act of the such director or high level personnel.
- And the last is the general liability third party insurance where the general practices of he business are covered such as product defects which results in loss, some disputes which resulted in financial loss etc.
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Normally the above type of third party insurance are seen in the outer world and not so much famous in India. Here the only famous type of the third party insurance is the insurance in motor vehicle, which has been made compulsory for every motor vehicle to provide the insurance while selling the same.
In India there are mainly two types of such insurance:-
- Own damage insurance, here the insured person is covered where the damage is covered if the damage is caused due to the negligence of the insured person itself. Here the cost of the premium is very much high due to the chances of the damage are very high.
- The other insurance is the third party insurance where the insured person is covered with the damages that have been incurred due to the act of the other person. The cost of the premium is low due to the chances that being incurred are less.
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Mainly people have misconceptions that the claim is being sanctioned by the company executive only but it is not the case. The claim is being sanctioned by a separate tribunal which is independent and the takes the decision which is considered to be final and which cannot be ruled out.