Filing a Third-party Lawsuit in Addition to a Workers Comp Claim



An employee performing his assigned job duties can be injured by a third party who has little or no link to the employee's business. These injury cases have special legal concerns.

In most cases, employees injured by independent third parties can file workers' compensation claims through their employers' insurance companies AND separate third-party negligence claims against those who inflicted the injuries.

If the employee receives an award from the third-party claim, most state laws require him to reimburse the workers' comp benefits. The employee keeps the remaining amount, such as awards for pain and suffering or punitive damages that are not covered by worker's comp.

Example: Delivery Man Hit by Drunk Driver

A delivery man on his work route is struck by a drunk driver and seriously injuried. The delivery man is entitled to collect workers' compensation benefits and pursue a personal injury claim against the drunk driver and his insurance company.

The delivery man's workers' comp insurance covers only medical benefits and partial wage reimbursement. The third-party personal injury award includes medical bills, out-of-pocket expenses, full lost wages, and compensation for the his pain and suffering. After reimbursing workers' comp the amount he received for medical expenses and a percentage of his wages, the delivery man keeps the remaining amount.

Example: Electrocuted While Installing Cable

A cable TV company assigned an employee to install Internet and cable access to a new apartment complex that is under construction. While putting in the lines, the installer is seriously injured by electricity from an exposed high voltage wire.

He files a workers' comp claim and a third-party lawsuit against the apartment complex owners. His lawsuit demands actual damages, pain and suffering, and punitive damages because of the apartment complex's gross negligence in having the cable company install lines while high voltage wires are exposed.

A jury awards the installer actual damages covering his medical bills, out-of-pocket expenses, full lost wages, pain and suffering, and a substantial amount for punitive damages. After he reimburses the workers' comp insurance company, the installer keeps the difference between the partial lost wages paid by workers' comp and the full amount of lost wages awarded by the jury, plus payment for his pain and suffering and the full amount of punitive damages.

Additional Third-party Actions

Defective Products

An employee who receives benefits from his employer's workers' comp insurance may file a third-party lawsuit against the manufacturer of a defective product that causes injury. This is referred to as a product liability lawsuit. The employee reimburses worker's comp and keeps the balance of the manufacturer's settlement amount or jury award.

Example: Defective Brakes

An employee drives a front-loader at a lumber yard while several co-workers are nearby. The driver of the front-loader finishes loading timber onto the company truck, sets the brake and climbs off. When he steps off the front-loader, it rolls forward and crushes the legs of one of the other employees. An investigation finds that the front-loader has a defective hydraulic brake system.

The employer was aware of the defective brake system for several months, but because the front-loader had been otherwise operating without any braking problems, the employer failed to have the brake system repaired.

In addition to workers' compensation, the injured employee has the basis of a defective product claim against the manufacturer of the front-loader. After reimbursing workers' comp, he keeps whatever is left from the third-party action.

While his employer's knowledge of the faulty brake system and failure to repair or remove the front-loader from service constitutes negligence, it probably doesn't rise to a level of gross negligence combined with substantial certainty. The employee most likely does not have the basis for a third-party suit against his employer.

Toxic Substances

You may have the right to file a third-party lawsuit against the manufacturer of a toxic substance that causes injury. Toxic substances can include poisonous fumes, lead based paint, asbestos, and other substances which directly or indirectly cause serious injuries. If you can prove your employer is aware of the existence of a toxic substance and fails to have it removed, you may also be entitled to sue your employer.

This is especially true when your employer is aware of the toxicity of the substance and fails to provide protective clothing, respirators, or otherwise fails to protect you from toxic poisoning. That can be the basis for a civil lawsuit against your employer for gross negligence, as there is a substantial certainty the toxic substance might seriously injure you.

Example: Asbestos Exposure

For six months, several full-time employees work at a jobsite removing debris. Although the employer knows the debris includes quantities of asbestos, he fails to tell the employees about the dangers and does not provide them with protective clothing, respirators, and goggles.

As a result of the exposure, an employee develops cancer. This employee has the basis for a third-party lawsuit against his employer. Because of the employer's gross negligence and a substantial certainty that the asbestos would cause serious injuries, the employee may be entitled to punitive damages.

Co-workers' Actions or Negligence

Lawsuits against co-workers are valid in cases of co-worker assault and when co-workers purposely, willfully, or by an act of gross negligence, cause your injuries.

Example: Fight at Work

Tension between two co-workers builds for some time. Finally, a heated argument escalates to physical violence. With no provocation aside from derisive language, one co-worker punches the other in the face, breaking her nose.

The injured employee has the right to workers' comp benefits, and has the grounds for a civil lawsuit against the worker who assaulted her. If the employer is aware of the assaultive co-worker's propensity for violence and has not taken appropriate action to discipline or remove the assaultive employee, the injured co-worker may also have the basis for a third-party civil lawsuit against her employer.

Suing Your Employer

Before accepting a position, be sure your prospective employer carries workers' compensation insurance or is otherwise self-insured. Most employers post their certificate of insurance in a common employee area, such as a break room. Check the expiration date, because if your employer's certificate of insurance expires, you aren't covered.

Be aware that a small company may not be required to carry workers' comp insurance. The issue of employee coverage may not seem important when you really need a job, but it will be if you're injured on the job and can't pay your medical bills or rent.

Generally you can't sue your employer for an on-the-job injury - that's the purpose of workers' compensation. But there are three primary exceptions when you can sue your employer:

  1. No Workers' Comp Insurance

    If your employer fails to carry state mandated workers' compensation insurance, you may file a lawsuit against him for your injuries and resulting damages. Unlike workers' comp claims in which you are only permitted to recover compensation for your medical bills and partial lost wages, employers who violate state laws by failing to provide required workers' comp benefits are subject to third-party lawsuits.

    In these cases, you can sue your employer for your resulting damages. Damages can include your medical bills, out-of-pocket expenses, the full amount of lost wages, and your pain and suffering. In extreme cases, the lawsuit may include punitive damages.

  2. Gross Negligence

    Even if your employer carries workers' comp, you may be able to sue him for a work-related injury when you can prove it was the result of your employer's willful, wanton, gross or reckless negligence. Some states include intentional or egregious conduct as sufficient proof of negligence for an injured employee to successfully sue her employer.

    To succeed in a lawsuit based on willful, wanton, or reckless negligence, you have to prove the likelihood that the employer's actions or inactions would result in injury. These cases are very difficult to prove because employers are normally exempt from lawsuits based on negligence alone.

  3. Employer Assault

    Workers' comp insurance does not protect employers from lawsuits brought by workers when the employer assaults an employee. In almost all cases, an employer-on-employee assault voids the no-fault limitation of workers' comp insurance coverage.

    The injured employee has the right to file a private, third-party lawsuit against the employer for medical bills, out-of-pocket expenses, full lost wages, and pain and suffering. In extreme cases, he can also seek punitive damages. Additionally, an assaulted employee has the right to file criminal actions against the employer.

    There is an exception to a third-party suit based on assault. Normally, employers are not liable for damages when the employer struck the employee in self-defense. When an employee initiates an assault and is injured, the employer's workers' comp insurance can deny coverage for his injuries.

Supplemental Workers' Compensation Funds

Every state has a special fund set aside to provide benefits to injured employees whose employers fail to carry state mandated workers' compensation insurance. Money for the fund comes from the premiums employers pay for their standard coverage. It's available to eligible, uninsured injured workers. Most of these state funds don't pay injured workers the full amount of benefits they would receive under a standard workers' comp insurance policy.

To be eligible to receive benefits from a state fund, your injuries must be the type normally covered under a standard workers' comp policy, and your employer doesn't carry the required workers' comp insurance. In most cases, you can sue your employer, although you may have to refund a portion of monies paid by the state's fund.

The Role of Attorneys

Should you have to file a lawsuit against your employer or other third party, you'll need the legal advice and counsel of an experienced workers' comp/personal injury attorney. Most don't charge for an initial consultation. It's wise to meet with one and discuss your case. You have nothing to lose and everything to gain.

Case Study

Injured by Falling Ice
In this premises liability claim, the plaintiff was injured by a chunk of ice falling off the building where she worked. There was a dispute between the building owner and management company regarding liability.

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