April 29, 2021
Subrogation: When third parties bear responsibility for work injuries
By Tom Davern, Esq., Senior Defense Counsel with Lynn, Scharfenberg and Hollick, and Julie Bischoff, Senior Subrogation and Special Investigations Representative
When one of your employees is injured in the course and scope of employment and a negligent third party bears some responsibility, we can sometimes recover a portion or all of the workers’ compensation claim costs from the responsible party through subrogation.
Each of SFM’s core states have different workers’ compensation subrogation laws, but the basic principles are the same across the board. If a third party’s negligence causes a work injury to some significant degree, there is a possible subrogation claim. The employer and insurer have to prove negligence, causation and damages.
When we recover claim costs, it lowers the impact that the claim has on future workers’ compensation premiums by mitigating the hit to the employer’s experience modification factor (e-mod). In 2020, our Subrogation Team recovered more than $1.5 million. In many cases, SFM recovers 100% of what was paid on the claim. In fact, full recovery was received on over 50% of the subrogation claims in 2020. A complete recovery is most likely when there is no liability dispute and the injury is not serious enough to allow or motivate an employee to pursue a personal injury claim. If the employee pursues a claim for damages against the third party, it usually results in a partial recovery for the employer and insurer.
Common recovery scenarios
Motor vehicle accidents, slip-and-fall injuries and dog bites are just three types of claims where we can often make subrogation recoveries.
For example, if a pizza delivery driver is hit by a drunk driver, we may be able to recover the workers’ compensation benefits paid from the at-fault driver’s insurer.
If there is provable negligence, slip-and-fall claims can result in a subrogation recovery; however, these have to be carefully analyzed on a case-by-case basis. There is not going to be a viable claim if a slip and fall happened in a parking lot during a blizzard, but if a vendor spilled oil in a hallway and failed to clean it up, there may be a claim.
If a dog bites a home health care worker or delivery person at a customer’s home, we may be able to recover costs from the individual’s homeowners or rental insurance policy. SFM also pursues product liability claims, medical malpractice and restitution in criminal matters.
How employers can help
If you have a claim that has recovery potential, your claims representative or someone from our Subrogation Team may reach out for assistance in the investigation. It is helpful to gather and preserve any available evidence in cases that may have recovery potential.
Anytime you think a third party could be responsible for a work injury, let your claims representative know. SFM aggressively pursues recoveries on behalf of our policyholders when another party is at fault.
Common requests for subrogation claims
- Motor vehicle accident: Police report, photographs of the property damage or scene, third-party driver/insurance information, and video of the incident (if available)
- Dog bites: Name and address of the dog owner and police or incident report
- Slip, trip and fall: Photographs of the area of the fall, any available video (we also recommend reporting the incident to the property owner)
- Assault: Whether criminal charges were filed, and if so, the name of the assailant
- Product liability claims: Secure the product and provide owner manuals, maintenance records, purchase receipts and manufacturer information (for equipment malfunctions, we recommend also taking photos and keeping any broken equipment)