Third-party liability insurance is essentially a form of insurance purchased by an insured (first party) from an insurer (second party) for protection against the claims of another (third party). The first party is responsible for their damages or losses, regardless of the cause of those damages.
There are two types of automobile third-party liability coverage:
First, bodily injury liability covers costs resulting from injuries to a person. These injuries’ costs could include 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. Examples of property damage include the payment to replace landscaping and mailboxes, as well as compensation for loss of use of a structure.