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August/September 2019  Volume 17, Number 4        

When to Subrogate a Workers' Compensation Loss

For there to be a workers compensation subrogation, there must be third-party fault.

Two examples:

  • At a construction site where employees of other contractors were involved in the incident.
  • Malfunctioning or defective equipment caused the incident.

If third party fault is involved, the (self-insured) employer or employer's insurer will consider filing a lien against the third party to the extent it believes the pay-outs were attributable to the fault of the third party.

If you think there may be third party liability, the first thing you or your insurer will do is determine if you have entered a hold harmless agreement with the third party that limits or entirely negates your ability to assign any liability to them.

Usually the main consideration is cost. Will bringing suit get the recovery dollars that make the attempt worthwhile?

"We consider the likely size of the workers compensation lien, cost in pursuing litigation against the third party, … existence of insurance and our likelihood in showing fault…," said Casey Woodruff, attorney at Woodruff Johnson & Evans, Chicago in a forum hosted by Business Insurance.

It can get complicated, as Jonathon Sayre, partner, Manning & Kass, Elrod, Ramirez, Trestor, LLP, Orange County, Calif., pointed out at the Forum:

"Counsel and carrier should discuss strength of the case against the third party, including the ability to prosecute the case, size of the lien and the cost to recover. Other considerations include whether the injured employee's counsel will file their own civil action."

Most of our clients do not usually get involved in a worker's compensation subrogation, but if you and your carrier do, please contact us if you need help understanding the process.

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In this issue:

This Just In...

How To Make Safety Education Fun and Effective

Five Exceptions to The Going and Coming Rule

9 Ways to Improve Your Workers' Comp Program and Save Money

When to Subrogate a Workers' Compensation Loss



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