Third Party Insurance

Third party insurance is liability coverage carried by the party who caused the injury. The injured person, called a third party to the policy, has no contractual relationship with the at-fault party's insurer but can recover from that insurer once liability and damages are established. Auto bodily injury liability, commercial general liability, and premises liability are all third party coverages.

In a typical motor vehicle case, the at-fault driver's liability policy is the primary recovery target. The injured claimant submits a demand, negotiates with the adjuster, and either settles for some portion of the policy limits or files suit. State minimum liability limits range from $15,000 to $50,000 per person, which is often far less than the actual damages, leaving the gap to be filled by underinsured motorist coverage.

The pharmacy lien attaches to the third party recovery. CreoRx funds prescriptions while the case is pending, the firm includes the pharmacy lien ledger in the demand to the third party carrier, and the lien is acknowledged and paid out of the settlement when the third party check clears. The pharmacy lien is not a claim against the at-fault driver's personal assets; it is a claim against the recovery the client wins from that driver's insurance.

Personal injury practice is largely the management of third party claims. The pharmacy lien partner has to understand the third party recovery dynamic and structure documentation to fit it.