Workers' Comp and Third-Party Injury Claims Interaction: Parties' Rights and Obligations, Remedies, Subrogation

While workers' compensation benefits are awarded when employees are injured on the job, situations may arise where an employee may be injured on the job due to a third party's negligent or reckless action. For example, an employee may be driving to a work-related appointment and be injured in an automobile accident caused by a reckless third party. At this point, the employee may consider bringing a third-party claim against the reckless driver which may complicate the process where the employee is also seeking workers' compensation benefits from their employer.

An employee may file a workers' compensation claim to cover immediate medical bills and a portion of lost income and simultaneously file a third-party lawsuit against the third party for additional remedies that are excluded from workers' compensation such as compensation for pain and suffering. However, while workers' compensation is a streamlined process that does not require establishing fault, a third-party lawsuit would require the employee to prove the third party's negligence or intentional wrongdoing.

Where an employee brings a third-party claim, the employer's insurance carrier may initially be responsible for workers' compensation payments; however, the insurance carrier may have a subrogation interest in the claim. Employers may also make their own demands in a third-party suit.

Counsel and their clients should understand the interaction between workers' compensation and third-party injury claims as well as the rights and obligations of the employee, employer, and employer's insurance carrier.

Listen as our expert panel discusses the interplay between workers' compensation claims and third-party lawsuits and the rights and obligations of the parties involved.