Parties, Roles, and Litigation Teams
Claims and Risk Roles
A third-party administrator provides claims handling services under contract, including investigation, reserving, defense counsel assignment, and settlement negotiation, for self-insured employers, captives, and carriers outsourcing administration.
The TPA does not carry the risk, which remains with the self-insured entity or carrier.
Alternative Names:
TPA, Claims Administrator (Insurance)
Why it Matters?
Working with a TPA changes the decision chain, since settlement authority above the TPA's threshold requires the self-insured client's approval, which adds time defense counsel must build into demand response planning. It also raises a question about who the client is for reporting purposes, and clarifying that at assignment prevents problems when a coverage or excess issue arises.
Frequently Confused with
Related terms
Frequently asked questions
Does a TPA bear the risk on claims it handles?
How does a TPA affect settlement timing?
