third-party coverage

Third-party coverage in insurance refers to a policy that provides protection or benefits to someone other than the policyholder. For example, in liability insurance, the insurer covers damages or injuries you cause to another person or their property. Essentially, the "third party" is the person or entity not insured but who benefits from the coverage in the event of a claim. This type of coverage is common in auto, liability, and health insurance, where the focus is on protecting others who might be affected by your actions or circumstances.