How a Waiver of Subrogation Can Impact Your Colorado Workers’ Comp
Discover how waivers of subrogation can impact your workers’ comp claim and
what it means for your rights as an injured worker in Colorado
Navigating workers’ compensation claims in Colorado can be complex, especially for workers injured by a third party. In some cases, workers may later discover that their employer signed a job contract that includes a waiver of subrogation, which can have significant implications for how their workers’ compensation claim is handled.
This article will explain what a waiver of subrogation is, how it might affect your ability to secure compensation, and what it could mean for your rights as an injured worker. You could still receive full workers’ comp benefits under Colorado law, and a Colorado workers’ comp attorney can help you determine if and how a subrogation waiver will affect your claim.
What is subrogation?
Subrogation is the legal process that allows one party, typically an insurance company, to step into the shoes of another party to pursue a claim against a third party who is responsible for a loss.
In the context of workers’ compensation, subrogation occurs when an insurance company pays benefits to an injured worker and then seeks to recover those costs from a third party who may have caused or contributed to the injury.
This process enables the insurer to recoup the expenses associated with the claim while ensuring that the responsible party is held accountable.
What is a waiver of subrogation?
A waiver of subrogation is a contractual provision in which one party agrees to waive their right to pursue recovery from a third party for losses covered by insurance.
In the case of a work contract, this typically means that an employer gives up the right for their workers’ compensation insurance company to try to recover money from a third party that may have been partly responsible for an employee’s injury.
These waivers are intended to help maintain smooth business relationships and reduce the risk of legal conflicts by clearly defining how insurance coverage will be handled in the event of an injury.
Here’s an example of how this might work:
Worker Wendy is employed by Construction Co., the contractor on a job in a building owned by the company OfficeBuildingsUSA. While Wendy was working on a flooring project, a wall inside the building collapsed and she was injured. The wall was negligently maintained by the property owner, and it was unrelated to the project by Construction Co.
Wendy received $50,000 in benefits under workers’ compensation for her medical treatment and lost wages during her recovery. However, because her injuries were caused by the property owner’s negligence, the insurance company could then file a lawsuit against that company to recover the $50,000 it paid out to Wendy.
If Wendy’s employer and the property owner have a subrogation waiver in their contract, then the insurance company would not be able to make a claim against the property owner for the cost of the benefits.
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What types of job contracts typically include a waiver of subrogation?
Waivers of subrogation are commonly found in contracts within the construction and service industries, where collaboration among multiple parties creates the potential for shared liabilities.
In the construction sector, these waivers are typically included in agreements between general contractors, subcontractors, and project owners to prevent legal disputes. By including a waiver of subrogation, each party ensures that their own insurance will cover any losses, even in the event of a workplace injury, without the insurer pursuing other parties involved in the project for reimbursement.
Similarly, in the service industry, contracts for maintenance, repair, or cleaning services often feature waivers of subrogation. These provisions protect both the service provider and the client by ensuring that if a worker is injured on the job, the insurance company cannot seek compensation from the client or other involved parties.
Does a waiver of subrogation prevent the injured employee from suing a third party?
No, a waiver of subrogation does not prevent the injured employee from suing a third party. The waiver only prevents the insurance company from pursuing the third party to recover the costs of the workers’ compensation claim.
The injured employee still retains the right to sue the third party independently for any damages that are not covered by workers’ compensation, such as pain and suffering or other non-economic damages.
The waiver simply ensures that the insurance company cannot seek reimbursement from the third party, but it does not affect the employee’s legal rights against the third party.
How might a waiver of subrogation impact my workers’ comp claim after an injury?
A waiver of subrogation can simplify the process for an injured worker by allowing them to pursue claims against both their employer’s workers’ compensation insurer and a third party without having to reimburse the insurer for any damages they recover from the third party.
Typically, if you receive compensation from a third party responsible for your injury, the workers’ comp insurer might require repayment for the benefits they provided.
However, with a waiver of subrogation in place, you can secure compensation from both sources without having to worry about paying back the insurer. This not only streamlines the process but also ensures you can maximize your financial recovery.
Get help from an experienced Colorado workers’ compensation attorney
If you’ve been injured on the job and have questions about how a waiver of subrogation might impact your workers’ compensation claim or if you have any concerns about your entitlement to benefits or the workers’ comp process in general, it’s essential to seek professional legal guidance.
The experienced Denver work injury attorneys at The Babcock Law Firm are here to support you. Our team has extensive experience handling complex work injury claims involving third parties and subrogation waivers. We’re dedicated to protecting your rights, ensuring you receive the full benefits you deserve, and guiding you through every step of the claim process.
