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Workers’ compensation insurance providers are not powerless when they have to pay out claims where a third party was responsible for the injury. In these situations, the insurance provider has the right of subrogation, where it can recover what it paid for the claim from the responsible party. Subrogation can occur when someone outside the employment relationship caused the injury.

Several Scenarios May Lead to a Subrogation Claim, Including:

• A third party causes the injuries (an example would be a car accident when the injured employee was on the job)
• A product liability action when the employee was injured by defective work equipment
• A premises liability claim when the worker was injured on someone else’s property

Subrogation does not impact the injured employee’s right to receive benefits; so long as they have suffered a work-related injury, they have the right to workers’ compensation benefits.

A Subrogation Action Cannot Be Taken Against the Employer or a Fellow Employee

An insurance company cannot try to recover the funds it paid out via subrogation action from the employer itself. The entire purpose of workers’ compensation insurance is to protect the employer from liability in the event of a workplace injury. The employer has fulfilled its obligation to the employee when it provided workers’ compensation coverage. In addition, a fellow employee is also considered part of the employment relationship, such that an insurance company cannot look to them to reimburse it via a subrogation action for claims payments made.

Insurance Companies Can Work with a Plaintiff’s Attorney for Subrogation Purposes

Since injured workers in Florida are only allowed to sue third parties for workplace accidents, if a plaintiff’s lawyer has filed a personal injury lawsuit against such a third party, that party may be liable to the carrier who paid the initial claim in a subrogation action. An employee may have filed a workers’ compensation claim first because they thought it was their only option and/or they needed the money. If an insurance company has paid benefits already, it can recoup those benefits if the plaintiff receives compensation from another responsible party. In other words, both the insurance company and the plaintiff have an interest in the success of a lawsuit against a viable third party.

There is nothing that says an insurance company cannot work with a plaintiff’s lawyer when they are on the same side. In fact, the employee and the carrier must cooperate with subrogation.  Conroy Simberg has a division that handles subrogation claims on behalf of insurance carriers.

Enlist the Cooperation of the Employer

The employer has an interest in helping its insurance company with a subrogation claim. While the employer did not pay the claim itself, the claims payment by its insurer can impact the insurance premiums it pays. As a result, the employer should cooperate with the insurer in its attempts to seek reimbursement from a potentially responsible third party. The insurance company can often get valuable information from the employer that can help with the subrogation claim. The employer must preserve any related evidence and give it to the insurer.

Preserve Evidence for a Third-Party Lawsuit

The employer has a legal obligation to preserve any evidence an employee could use when they file a lawsuit against a responsible third party. There may be significant consequences for an employer if it fails to do so, including the employee suing the employer for spoliation of evidence.

In Cambridge Integrated Services Group v. Shaw, the Florida Supreme Court took up a case regarding subrogation and repayment of benefits received. In that case, the worker was able to successfully sue their employer for spoliation of evidence for negligently failing to retain a defective ladder that caused the worker’s injury. The worker was awarded nearly $2 million by a jury, including costs and interest. If there is any chance a third party may have been responsible for a workplace injury, the employer must proceed carefully because it can have legal obligations beyond workers’ compensation. These obligations come into play most often when an employee is suing a product manufacturer in a products liability lawsuit.

Keep an Eye on The Clock and the Case

Whether an employee files a lawsuit against a responsible third party or not does not affect an insurance company’s ability to seek subrogation. Under Florida law, the employee has one year to file a lawsuit against the responsible party. If they do not file this lawsuit after one year, the insurance company then has the right to directly file a claim against the third party for the repayment of workers’ compensation benefits. The insurer has one year to file this lawsuit before the right to sue reverts to the employee. Therefore, the insurer should pay close attention to deadlines and the legal docket.

Get Legal Help

Workers’ compensation issues are complex with many moving parts and often multiple parties involved. If subrogation is an issue, there is the potential for a lawsuit. Therefore, an insurance company should work with an insurance coverage attorney when it pursues subrogation. An attorney will help gather necessary evidence and file a lawsuit on behalf of the insurer if warranted.