By Neil Crowley
Perhaps the easiest way to start is to use labels and examples.
First party = an insured
Second party = typically an insurer
Third party = someone without a relationship to the other parties.
The first and second parties are usually bound by a contract.
If you are in a car accident, you (first party) can go after your insurer (second party) for the damage to your car if you have collision coverage in your insurance contract. You (for your injuries) or your insurer (for the money they paid to fix your car) each have a claim against the person who caused the accident (third party).
If you were at fault in an accident, there are only two parties to the claim.
You are a carpenter and are hurt at work when the head of your hammer flies off and hits you. You (first party) may be entitled to workers compensation since you were hurt while on the job. You would make a claim against the workers compensation insurer (second party) for your lost wages.
Easy, right? Of course, you may also have a claim against the manufacturer of the hammer (third party). While we’re at it, the workers compensation insurer would also have a claim against the hammer manufacturer (also third party) for whatever amount they paid out to you.
We have spoken with people who didn’t realize they had a third party claim. It can make a big difference. For example, workers compensation claims do not include pain and suffering but third party claims do. Contact Brooks and Crowley and we can evaluate your situation.