Third-Party Claims

A third-party claim is a type of financial or legal claim made to someone who is not one of the primary parties of an accident or injury. Examples may include insurance companies, the employer of someone who caused an accident while on the job, or a manufacturer whose product caused injury to someone other than the user.

Types of Third-Party Liability

Third-party claims are made on the basis of third-party liability, which holds companies and individuals responsible for their products, property or actions that harm someone indirectly. Most third-party claims are handled by filing a lawsuit, though some claims may be filed directly (such as to an insurance company). The third party responsible for paying claims differs depending on the specific situation and state law.

Third-Party Product Liability

Third-party product liability arises when the manufacturer of a product is held responsible for injuries that happen to someone other than the primary buyer or user of the product. Such situations can arise in a few ways:

  • When a person is injured by a product used by someone else – For example, an exploding e-cigarette that hurts or kills someone other than the person using it (also called a “bystander claim”)
  • When an outsourced component of a more complex product malfunction – For example, defective Takata airbags installed in many makes and models of automobiles
  • When an employee is harmed by a product required for a job – For example, defective machinery, equipment or tools that lead to a construction accident

In some cases, third-party liability may apply even if the defective product is only partially responsible for the injury. Every state allows some kind of relief for third-party product liability claims, though the specific rules are different from state to state.

Third-Party Vehicle Accident Claims

In addition to defective components, vehicle accidents can lead to other third-party claims. These claims may be based on the owner of the vehicle and who is driving.

  • Employers: Businesses are responsible for accidents caused by their vehicles and/or employees while on the job.
  • Owners: Vehicle owners are generally responsible for accidents caused by their vehicle, even if someone else is driving it.
  • Parents: Parents (or other guardians) may be held responsible for vehicle accidents caused by their minor children.

Some states have exceptions to these situations. For example, if someone steals a car, then the owner (including a business owner) may not be responsible for injuries caused by the car thief.

Note: Third-party accident claims can also refer to which insurance company a person submits accident claims to. In vehicle accidents, a third-party claim is submitted by the injured person to the other person’s insurance company. Rules about which insurance drivers should submit claims depend on whether the state where the accident occurred is an at-fault state or no-fault state.

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Third-Party Premises Liability

Premises liability refers to accidents or injuries that occur on a person’s or company’s property (including rented or leased property). Third-party premises liability can arise in several situations.

  • Trespassers: While trespassers are generally responsible for their own actions, a property owner can be held liable in some circumstances if the trespasser hurts an invited guest, such as a customer shopping at a store, a guest at a hotel or a person visiting a public park.
  • Employees: If an employee injures someone else while on the job, the employer is generally held responsible for the employee’s actions (known as “vicarious liability”).
  • Tenants: Tenants may accept liability for the premises they rent as part of a lease contract, indemnifying the property owner from liability. However, the landlord could still be held responsible for certain parts of the property, such as common areas or the general construction of a building.
  • Criminal Attacks: Many state laws require property owners who invite the public onto their property to take reasonable precautions against “foreseeable” attacks or assaults (referred to as a “duty of care”).

Specific responsibilities of property owners are extremely variable depending on where the property is located. It is best to talk with a local lawyer to understand premises liability in your state.

Third-Party Lawsuits

Third-party liability provides grounds for filing a lawsuit against the party or parties responsible for an injury. Before filing a third-party lawsuit, however, it is necessary to demonstrate that the third party (such as a manufacturer or a building owner) had a responsibility to keep the injured person safe and contributed to the injury.

Duty of Care: While often used as a term to describe the responsibility of doctors to care for their patients in medical malpractice cases, “duty of care” can also refer to the responsibility of a person, business or other entity to provide a reasonably safe and secure environment for their invited guests. This can include everything from making sure parking lots are well lit to having competent and attentive security guards, depending on various factors. Failing to meet a legitimate duty of care can be grounds for a personal injury lawsuit.

Product Defect: A product defect can refer to a manufacturing defect (problems caused by production issues), a design defect (problems with the product’s engineering itself), or a marketing defect (lack of warning or inadequate warning of potential risks). Defects can lead to product lawsuits if they cause injury to either the user (first party) or a bystander (third party).

Third-Party Lawsuits and Workers’ Compensation

Workers’ compensation is a type of insurance that protects both employers and employees in the event of an accident at work (or on the job, if outside of a defined workplace). Receiving workers’ comp benefits ensures that the injured employees will have their medical and rehab bills paid for and continue receiving some income. However, it also prevents employees from suing employers for work-related injuries.

In some cases, individuals injured at work may also be able to file a third-party lawsuit against someone other than their employer. This option is available when the injury is caused by someone other than the employer, such as a manufacturer of a defective device, a drunk driver, or a property owner who neglects dangerous conditions.

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Third-Party Lawsuit Settlements

The majority of third-party lawsuits end in a settlement rather than going to trial, which can be expensive and take a long time. Third-party settlements arise when both the plaintiff (the injured person) and the defendant (the person or company liable for the injury) agree to end the lawsuit based on a number of terms, such as monetary compensation to the plaintiff.

Third-party settlements often have a confidentiality clause, meaning that neither party is allowed to reveal the terms of the agreement itself. Settlements also typically include a “no admission of fault” clause, indicating that the defendant does not admit to any wrongdoing.

Filing a Third-Party Claim

The process for filing a third-party claim can be complex and confusing. Different types of claims require different procedures, and making an error could delay your case or even cause you to lose your legal rights (such as by failing to meet deadlines set by the statute of limitations).

If you believe you have a third-party claim, it is best to talk with a lawyer to get a free case review and see if you have a viable claim. Simply click on the link below to browse our current list of lawsuits and find a lawyer who can evaluate your case.

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Third-Party Claim Terminology

Bystanders

A bystander is someone who is injured but had no direct involvement in the circumstances that led to an accident. The term can mean different things depending on the type of claim:

Defective Products: A bystander is anyone injured by a product but who was not directly involved in the purchase or use of a defective product. For example, if a defective lithium-ion battery causes a fire injuring or killing people other than the user, those people would be considered bystanders.

Vehicle Accidents: Bystanders include anyone hurt by the secondary consequences of a crash. For example, if a truck crashes into a car, and then the struck car hits a pedestrian, the pedestrian would be considered a bystander.

Construction Accidents: Bystanders include those who are not working at the construction site, such as anyone walking or driving by a worksite.

These examples notwithstanding, bystander claims are complex, and definitions can vary based on where the injury occurred and which statutes apply.

Duty of Care

Duty of care refers to the responsibility a person, company or other entity has to look out for the safety and security of others from reasonable or foreseeable harm. This duty might extend to visitors (especially those invited onto a property), bystanders and others, depending on the situation. Duty of care can be breached through negligence, whether intentionally or not, which may be grounds for a lawsuit.

Subrogation

Subrogation is the right of an insurer (such as a workers’ compensation insurer) to recover funds from a third-party verdict or settlement. Only the amount actually paid by the insurer can be subrogated, and some states limit or prohibit subrogation altogether. In cases where subrogation is allowed, the insurer may be responsible for a portion of the costs of the recovery, such as attorney fees and court filing fees, reducing the subrogation amount.