The Facts About Third-Party Liability Insurance

General Third-Party Liability Insurance with Rogers

Most people think of car accidents when they hear third-party liability insurance. But did you know this is an important aspect of your home and business insurance coverage, too? Third-party liability insurance can help protect you or your business in the event you’re held liable for a third-party’s bodily injury or property damage. What does that mean, exactly? If someone gets hurt or as their stuff damaged by your accidental actions, you can be sued. Third-party liability insurance with Rogers can help you cover legal expenses, including defence costs, settlements and awards.

We’ll go into more detail about general third-party liability insurance as well as the specifics when it comes to car, home, and business insurance. You can also request a third-party liability quote online, by phone, or in-person at one of our offices.

What is Third-Party Liability Insurance?

Whether you type it as third or 3rd party liability insurance, it’s the same thing: you can be held financially responsible for someone’s bodily injury or property damage. This can occur because of a car accident you’re claimed to be at fault for or due to an incident at your home or place of business. The third-party can sue you for damages – even if you’re not at fault, this can be expensive. General third-party liability insurance may cover your legal expenses, including defence costs, settlements and awards. It may also cover medical benefits and associated costs, depending on the incident.

Who is the third party? Actually, there are a few parties that are referenced when it comes to this type of coverage:

  • First Party – You, the insured.
  • Second Party – Your insurance company.
  • Third-Party – Any other party (person or company) involved in the incident.

Third-party liability coverage will only ever cover legal, medical or associated costs up to your policy limit and only for third parties. If you were involved in an at-fault car accident, for example, your vehicle would not be covered under this insurance (you’d need collision coverage). However, if you were not at fault, the other party’s insurance may be responsible for covering the repairs or replacement of your vehicle.

Third-Party Liability Car Insurance

This is the most well-known type of third-party liability insurance, as it is mandatory coverage for all drivers across Canada. This is what covers third-party bodily injury in the event of a car accident. For example, if you rear-end someone because you weren’t paying attention and didn’t maintain a proper following distance, your third-party liability insurance would cover the costs of injuries of the people in the vehicle you hit. It would also help cover your legal expenses if you’re sued. 

 As of January 2022, the Government of Alberta introduced direct compensation property damage (DCPD) coverage. DCPD changes who pays for vehicle damage claims. Through DCPD, you will work directly with your insurer to have any repairs or replacement costs covered if your vehicle is damaged in a collision that you did not cause (partial benefits are also available if you’re deemed partially at-fault for the crash).  

At Rogers Insurance, we always recommend having more than the minimum provincial mandatory liability coverage as legal expenses and medical bills can quickly become astronomical and surpass this low amount. We recommend clients carry $2 million worth of coverage.

Home Insurance Third-Party Liability Coverage

Did you know your home insurance includes some third-party liability insurance coverage? This covers visitors to your home or if you accidentally cause harm to someone or their property. It can help cover the cost of legal expenses, medical repair, and replacement or repair of property, up to your policy limit.

Here are a few commonly covered causes of damage:

  • Dog bite (if your dog’s breed is not exempt)
  • Someone slipping, falling and injuring themselves at your home
  • A house fire destroying a guest’s stuff
  • Accidentally hitting someone else’s house with a baseball or golfball and causing damage

Remember, not all scenarios are covered. Intentional acts are not covered. For example, if you push someone down the stairs and they sue, you won’t be covered. You’re also subject to your policy limits (the maximum amount that will be paid out in the event of a claim) and you’re generally required to pay a deductible before your insurance kicks in.

If you need excess liability insurance (especially if you have valuable assets or own a business) or require specialty liability insurance, you could look into an umbrella liability insurance policy.

Third-Party Liability Insurance for Businesses

Businesses have a lot of options when it comes to third-party liability coverage – all of them protect for different causes of damages to third parties. Here’s a list of some of the most common:

  • Commercial General Liability – If someone is injured or has their property damaged while on your business premises or as a result of your business operations.
  • Professional Liability – If you offer a professional service or advice, a third party can hold you liable for financial loss.
  • Product Liability – If you manufacture or sell products, a third party can hold you liable for injury or damage as a result of that product or its malfunction.
  • Cyber Liability – if your business suffers a data breach or cyberattack, you could be held liable for the damage to third parties.
  • Directors & Officers Liability – You can be held liable for wrongful acts that harm third parties.

Talk to an experienced liability insurance broker at Rogers Insurance for more details on these third-party liability coverages and to discuss your individual needs.

Who Needs Third-Party Liability Insurance?

Everyone should have some level of third-party liability coverage. Otherwise, you could be on the hook for expensive lawsuits and other costs.

If you own a car, you are legally required to carry a minimum amount of third-party liability insurance by all Canadian provinces and territories. At Rogers Insurance, we strongly recommend opting for a higher limit as accident damage and injury lawsuits can quickly get very expensive.

If you’re a homeowner, most home insurance policies include some third-party liability insurance coverage. We can discuss your risks and the likelihood of a lawsuit to ensure you have the right amount of coverage. If you need more protection, a personal umbrella liability insurance policy can provide additional coverage.

If you’re a business owner, you should have a commercial general liability insurance policy at the very least; your other coverages will depend on the size of your business, industry, and other factors.

How much third-party liability insurance you need will depend on a variety of factors. It’s best to talk to an insurance broker directly; as they can help you determine your insurance needs.

Why Third-Party Liability Insurance Is Better with Rogers

Rogers Insurance has been a trusted insurance broker since 1977. From our roots in Alberta, we’ve grown across Canada as one of the largest independent insurance brokerages in the country. We have access to over 90 global insurance companies. What does this mean for you? It means we’re working for you – not an insurance company. It also means we can get you competitive 3rd party liability insurance quotes and offer a choice with your coverage.

Here’s what our brokers can do for you:

  • Determine your third party liability insurance needs.
  • Deliver competitive general liability insurance quotes.
  • Act as your insurance resource and advisor.
  • Advocate on your behalf if you have a claim.

Our brokers are experienced and knowledgeable. We believe in a hands-on, human approach to insurance. Experience the difference with Rogers Insurance by requesting a 3rd party liability insurance quote online, by phone, or at one of our offices today.

NOTE: This blog is meant to be advisory in nature and should not be relied upon as legal advice or a definitive statement of law in any jurisdiction. No liability is assumed by Rogers Insurance for any actions taken as a result of information contained in this blog. For more details on anything discussed in this blog, consult with a Rogers Insurance representative.

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