How Workers Compensation Claims and Personal Injury Claims Affect Each Other

by Stephanie Z.

I was hit by a driver who ran a red light while I was driving for my employer. Does my pending workman’s compensation claim affect my personal injury claim against the other driver’s insurance company? Andrea, Pasadena

Your workman’s or worker’s compensation (WC) claim is affected by your personal injury claim arising from the same accident, and vice versa. If you were to collect payment for your injury claim both as benefits from your employer’s workers compensation carrier and a judgment or settlement from the other driver’s insurance company, that would be considered double recovery. You could be considered unfairly enriched and the applicable laws in most states discourage that.

In order to avoid this double recovery, most workers’ compensation laws provide for an employer’s subrogation rights. This means that the WC carrier has the right to pursue the other party or the other party’s insurance carrier for reimbursement of the WC benefits that were paid to you. If you make a double recovery without arranging to protect the subrogation rights of the WC carrier, then you can be made to repay the WC benefits to the carrier. Usually, you need only to notify the WC carrier that another driver (third party) caused your injury and the WC carrier will take care of notifying that driver and their insurance company of their subrogation rights.

If you have notified your WC carrier of the existence of the third party (the driver who was at fault) and that WC carrier fails to notify the other insurance company of their subrogation rights before you make your personal injury settlement, then the WC carrier might not be able to collect reimbursement for the benefits that you were paid unless for some reason you had agreed to reimburse them yourself.

The right thing to do, as well as the safest from a legal standpoint is to just make the workers’ compensation carrier and the other driver’s liability insurance carrier aware of each other. That way, the burden and stress of worrying about whether any carrier’s rights are being protected is off you.

This article is approved for informational purposes only and is not intended to take the place of competent legal counsel.

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