A third party in a legal action is a person or entity who is not one of the two main people involved in an argument or case.
For instance, if you are in an auto collision, the third party may be the other party’s insurance company.
In workers’ compensation, a third party claim usually refers to a claim that occurs in addition to the workers’ compensation claim. It may be due to a faulty piece of equipment; in which case the third party may be the manufacturer of the equipment.