What is a Third Party Over Action Claim?
A Third Party Over Action Claim is a lawsuit brought against you by a third party via liability you have assumed in a contract. Most commonly, these claims happen when an employee or subcontractor sues an entity with which you have signed an indemnification agreement.
For example, let’s say you sign an indemnification agreement to get into a building and one of your employees could gets injured. That employee is entitled to workers compensation, however he can also turn around and sue the building. You have a contract to indemnify the building, so the lawsuit ends up falling on your head.
This is particularly dangerous in states like NY where there is strict liability, and the employer has virtually no defense.