Workers’ compensation is designed to provide injured workers with a no-fault system for obtaining medical treatment and partial wage replacement after a workplace injury. It is quick, it does not require proving negligence, and it provides a reliable baseline of benefits for workers hurt on the job. But workers’ compensation is not designed to fully compensate an injured worker for everything a serious workplace injury costs. It covers medical bills and a portion of lost wages. It does not cover pain and suffering, full lost income, or permanent impairment beyond the statutory schedule.
What many seriously injured workers do not know is that a third-party personal injury claim, pursued alongside and in addition to the workers’ compensation claim, can provide the full compensation that comp alone cannot. When someone other than the employer contributed to a workplace injury, that third party can be sued in civil court, and the damages available include everything that workers’ comp excludes.
What Workers’ Compensation Actually Provides
Workers’ compensation benefits in most states include medical treatment coverage for injuries arising out of employment, temporary disability payments typically covering two-thirds of the worker’s average weekly wage, permanent disability benefits calculated according to a statutory schedule that assigns values to specific body parts and impairment percentages, and vocational rehabilitation in some cases where the worker cannot return to their prior occupation.
What workers’ compensation does not provide is equally important to understand: there is no recovery for pain and suffering under any workers’ compensation system. There is no recovery for the full value of lost earning capacity beyond the statutory rate. There is no recovery for loss of enjoyment of life, disfigurement beyond the statutory schedule, or emotional distress. For a worker with serious, permanent injuries, these excluded categories can represent the majority of the total economic and human cost of the injury.
When a Third-Party Claim Is Available
A third-party claim arises when someone other than the employer or a co-worker caused or contributed to the workplace injury. The most common third-party scenarios include:
- Equipment and machinery manufacturers: When a defective machine, power tool, or piece of safety equipment failed and caused the injury, the manufacturer faces product liability alongside the workers’ comp claim
- Contractors and subcontractors: On construction sites and industrial facilities where multiple companies work simultaneously, an injury caused by the negligence of one contractor can support a third-party claim against that contractor even if the injured worker’s own employer is immune from suit under workers’ comp
- Property owners: When a worker is injured on premises owned by a third party whose negligent maintenance of the property contributed to the accident, a premises liability claim is available against the property owner
- Vehicle operators: Workers injured in traffic crashes during the course of employment have workers’ comp claims against their employer and personal injury claims against the at-fault driver
- Chemical and toxic substance manufacturers: Workers exposed to toxic substances that cause occupational illness have product liability claims against the manufacturers of those substances, separate from and in addition to any workers’ comp claim
How the Two Claims Interact
Workers’ compensation and third-party personal injury claims are pursued simultaneously but through different legal channels. The comp claim provides immediate medical coverage and wage replacement during the period before a third-party settlement or judgment is reached, which can be months or years. When the third-party case resolves, the workers’ comp carrier typically has a subrogation right to recover the benefits it paid from the third-party proceeds.
The U.S. Department of Labor’s workers’ compensation resources provide guidance on federal workers’ compensation programs and the interaction between those programs and third-party claims, including how subrogation works and what the worker retains after the comp carrier’s lien is satisfied. Negotiating the subrogation lien down to maximize the worker’s net recovery is one of the most practically important functions of a workers’ compensation attorney who also handles the third-party claim.
The Value of Representation That Covers Both Claims
Workers who retain separate attorneys for their comp claim and their third-party claim, or who handle one while an attorney manages the other, create coordination problems that can reduce the total recovery and complicate both proceedings. Working with experienced workers’ compensation attorneys who also handle the third-party litigation provides the coordinated strategy that maximizes the total recovery across both claims, manages the comp carrier’s subrogation interest, and ensures that neither proceeding undermines the other.
