Third-party liability coverage for businesses is a type of insurance that protects companies against claims related to damage caused to others or to their property. This includes damage caused by products, operational activities, employees, and facilities. 

If such a claim is made against an insured company, the insurance covers the legal costs and indemnities for which the company is held liable under the law. This coverage is often required by commercial contracts, and can help protect companies against the significant financial costs that can arise from liability claims.