Crash in a Work Vehicle: Workers' Compensation Plus a Third-Party Claim

Published December 2, 2014 · Injury Law Basics

A home-health aide driving between patients in Kettering is rear-ended at a light. A delivery driver on I-75 is sideswiped by a semi. A sales rep is T-boned at an intersection in Beavercreek on the way to a client. Each of them is hurt on the job, and each of them is told, correctly, that workers' compensation will cover the medical bills. What many are never told is that they also have a second claim, against the driver who hit them, and that the second claim is usually the one that pays for everything workers' compensation does not.

Two claims, two tracks

Ohio's workers' compensation system is a trade-off. An employee hurt in the course of employment receives medical treatment and partial wage benefits without having to prove anyone was at fault. In exchange, the employee generally cannot sue the employer for negligence. If you were driving for work when you crashed, you are covered even if the crash was your own fault.

But the trade-off is between you and your employer. It does not protect the stranger who ran the red light. Ohio law has always allowed an injured worker to pursue a negligence claim against a "third party," meaning anyone other than the employer or a co-worker, who caused the injury. The other driver, the trucking company that employs him, the bar that over-served him, or the manufacturer of a defective part can all be third parties.

The two claims run on separate tracks, in separate forums, under separate rules, and a worker needs both.

What workers' compensation pays, and what it does not

Workers' compensation pays medical bills related to the injury and a portion of lost wages, typically about two-thirds, subject to statutory maximums. It may also pay scheduled awards for permanent partial disability and, in catastrophic cases, permanent total disability.

What it does not pay is just as important.

• Pain and suffering. Workers' compensation pays nothing for the human cost of the injury: the months of pain, the lost ability to play with your kids, the anxiety about driving again.
• Full wages. The gap between your wage-loss benefit and your actual paycheck is yours to absorb, and overtime, raises, and lost earning capacity are not fully accounted for.
• Spousal losses. Your spouse's loss of consortium is not a workers' compensation benefit.
• Property damage. If it was your own car, your personal auto insurance or the other driver's covers it, not the BWC.

Every one of those categories is recoverable in the third-party negligence claim. We discussed how to document the full economic loss in our post on lost wages and earning capacity. In a serious crash, the third-party claim is routinely worth several times what workers' compensation provides.

The BWC's subrogation right

The reason the two claims must be coordinated is a statute, R.C. 4123.931. It gives the "statutory subrogee," meaning the Bureau of Workers' Compensation or a self-insured employer, a right of recovery against the third party for what it has paid. In plain terms, the BWC gets to be repaid from your third-party recovery for the medical bills and wage benefits it provided. We explained how long that right lasts in our earlier post on the BWC lien.

Three features of the statute matter for a worker hurt in a crash.

The formula. R.C. 4123.931(B) and (D) set out a formula for dividing a settlement or verdict between the worker and the BWC. The worker receives a share equal to his or her uncompensated damages divided by the sum of the subrogation interest plus the uncompensated damages, multiplied by the net recovery; the BWC receives the rest. The practical effect is that the larger the worker's uncompensated damages, meaning pain and suffering, the wage gap, and future losses, the larger the worker's share. That makes documenting those damages essential even before settlement talks begin. The statute also lets the worker and the BWC agree to a more fair and reasonable split, and provides a conference process when they cannot.

The notice requirement. R.C. 4123.931(G) requires the worker to notify the BWC of all third parties against whom a claim may exist, and provides that no settlement is final unless the BWC has had prior notice and a reasonable chance to assert its rights. If the BWC is cut out, the worker and the third party can be held jointly and severally liable for the full subrogation interest. A worker who settles quickly with the other driver's adjuster without involving the BWC can end up owing the money back.

It reaches your own insurance. Under R.C. 4123.931(I)(1), the subrogation right applies to amounts recovered from the worker's own uninsured and underinsured motorist coverage. If the other driver was uninsured and you recover under your own policy, the BWC has a claim on that too.

Common work-vehicle scenarios

• The other driver has minimum limits. With $25,000 in liability coverage and a $60,000 workers' compensation lien, the math can look hopeless. It usually is not: your own UIM coverage, the employer's commercial auto policy, and a negotiated allocation with the BWC can all change the picture.
• The other vehicle is a commercial truck. Trucking companies carry higher limits and are subject to federal rules that generate evidence. See our page on truck accident claims.
• A co-worker was driving. If a co-worker caused the crash in the course of employment, the claim against that co-worker is generally barred, and workers' compensation is the remedy against the employer. The other driver, if any, remains a third party.
• You were in a company vehicle. The employer's commercial policy may provide UM/UIM and MedPay coverage for you as an occupant, in addition to your personal policy. Every policy must be identified.

What this means for you

If you were hurt in a crash while working, file the workers' compensation claim promptly so your bills are paid and your treatment is not delayed. Then, before you speak with the other driver's insurer, talk to a lawyer about the third-party claim. The adjuster will know you are receiving workers' compensation and will use it to argue that you have been taken care of. You have not. Your pain and suffering, your full wages, and your spouse's losses are uncompensated, and the third-party claim is the only way to recover them.

The two claims must be handled together: the third-party case should be built with the subrogation formula in mind, the BWC must be notified and its lien negotiated, and no release should be signed until the allocation is settled. We described how liens affect a recovery in our post on health insurance subrogation; the workers' compensation lien follows its own statute but the principle is the same. Learn more about how we handle car and truck accident claims in the Dayton area.