A third party refers to a person, organization, or entity that is not covered by insurance but may be affected by the actions or events included in the policy. In such a context, the two primary parties are often referred to as the first party and the second party.

For example, in auto insurance, a third party can be a person involved in an accident with the policyholder, who is the first party.

Additionally, it refers to a type of coverage that provides protection against claims made by external parties. It typically covers third-party liability, which is the legal responsibility of the insured party for any harm, damage, or injury. It specifically refers to the legal responsibility of the insured party for any harm, damage, or injury caused to a third party.