Sustaining an injury at work can create a significant social and economic dilemma. You may be forced to be out of a job for some time and face the financial burden that comes with the injury.
In most cases, a workers’ compensation claim comes in as a relief for your lost wages and medical expenses. But the settlement is rarely sufficient, forcing you to seek additional ways to maximize your benefits.
A third-party claim is among the popular legal options you can pursue to increase your payment. Unlike worker’s compensation, it allows you to sue another person or entity beyond your employer. Here is what you should know about the option before considering it.
What Is a Third-Party Claim in Workers’ Compensation?
It is a case against another person who is not your employer or does not work for the same organization as you. It can be an employee from another business or someone who just visited your workplace.
When the third party significantly contributes to your injuries, you are legally allowed to hold them responsible under federal employment laws.
A third-party claim allows you to recover more damages that a standard workers’ compensation may not. These include:
- Pain and suffering.
- Full lost wages.
- Loss of future earning capacity.
This broader cap on settlement is important when you can no longer work due to injuries, and the available payment from your employer may not sustain you for long.
When Can You File a Third-Party Liability Claim
You may seek payment if someone outside your employer’s direct control causes your losses. Several situations can trigger the process.
However, you must prove that the other party owed you a duty of care and breached that duty, which directly affects you. Some qualifying situations that may warrant a third-party claim include:
- Equipment manufacturers may be liable if their faulty machineries cause your injury.
- If you are injured in a traffic collision while performing work-related duties and the other driver is found responsible.
- If you sustain injuries while working in a premise not owned or controlled by your employer.
- If another manufacturer is responsible for exposing you to harmful substances.
- When working on a site with multiple contractors, one that fails to follow safety guidelines can lead to injuries.
Note that you should notify your employer if you intend to sue a third party. The notice should specify the party responsible for your injuries and the amount of damages you claim.
Understand that your employers’ insurance company may also seek reimbursement from your compensation through subrogation. This is where the insurer has a right to recoup some or all of the benefits they have already paid once you recover money from the negligent party.
Key Differences Between Third-Party and Workers’ Compensation Claims
Both claims give support when you sustain injuries while at work. However, they differ in their eligibility requirements and the amount recovered.
For example, in a workers’ payment, you file a case with the employer’s insurer. If they approve it, they only pay for a portion of your damages.
The case is different when suing a third party where you file a personal injury claim against a direct responsible person.
If they prove fault, they pay for the harm they have caused you. The two lawsuits differ in several key ways, including:
Burden of Proof
A Claim against an outside party requires you to prove that their ignorance or intentional actions caused your injuries.
That means you cannot recover damages without enough support that another person or entity is responsible for your suffering.
The process can be challenging as it requires you to provide proof of duty and its breach. You must also provide evidence for causation and damages.
In contrast, worker’s compensation allows you to recover damages without extensive proof of who is responsible. That means you can receive medical care and disability benefits even if you are responsible for your injuries.
However, that is only possible if you were working within the company’s policy and you were not intoxicated.
Source of Payment
If a case against a third party is successful, their insurance company pays for the damages. They may also pay from their pocket if they do not have any coverage plan.
Meanwhile, payments from worker’s compensation claims are made by the employer’s insurance company. If the employer does not have a protection policy, they may be compelled to pay directly from their pockets.
Compensation Amounts
A third-party payment covers all losses you incur due to injuries. These include economic damages like medical costs and lost wages, and subjective damages, including pain and suffering.
Settlements from third-party lawsuits are higher since they include all projected future earnings you have lost due to permanent injuries. However, the amount you can recover is subject to the at-fault ability to pay.
In contrast, workers’ compensation only covers your hospital costs and a portion of your lost earnings. State employment laws and your average weekly earnings also limit the settlements. This makes them lower than third-party payments, a primary reason you may consider other channels to increase the compensation amounts.
The Legal Process
Both claims may follow the same legal process where you file the case and negotiate if you disagree with the first order. However, each process has a few legal tweaks that determine the outcome.
For instance, workers’ compensation claims are handled primarily by the employer’s insurance company. The case only goes to court if the insurance company denies the claim or determines it to be fraudulent.
In a third-party lawsuit, you file the case directly against the responsible party in a civil court. As a claimant, you provide all relevant proof and the amount of damages you claim and allow the liable party to respond.
If the amount is too high, the other party’s insurance company may refuse to pay and seek negotiation. Your employer’s insurer may also have an interest in your settlement. Working with a reliable attorney is essential to help you gather evidence and negotiate your damages.
Endnote
Filing a lawsuit against a third party offers a vital path to full recovery from work-related injuries. That is particularly essential when workers’ compensation may not provide sufficient support for ongoing medical expenses and future financial stability. However, the process has its challenges that may make you question its benefits. If you are considering pursuing any payment from a third party, obtaining legal guidance is non-negotiable.
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