As a business owner, you may be wondering why this article is addressing personal injury lawsuits. You are covered by workers’ compensation insurance, right? Doesn’t workers’ compensation insurance pay injured workers’ medical expenses and lost wages due to an accident?
Yes, it does - but not always. Although workers’ compensation law differs slightly in each state, there are many circumstances under which, universally, workers’ compensation insurance will not pay, exposing you to the risk of being sued. This article gives you four such circumstances to avoid.
Why Workers’ Compensation Insurance Benefits Both Employers and Employees
By enacting workers’ compensation statutes, each state in the United States has eliminated the need to prove liability for workplace accidents, provided a more streamlined way for injured employees to get medical expenses paid and be compensated for lost wages, and prevented employer-employee relationships from becoming adversarial due to a lawsuit.
The workers’ compensation scheme protects employers from lawsuits, gets injured employees paid more quickly than if they sued, preserves the employer-employee relationship, and provides a way for injured employees to get the medical attention they need to recover and get back to work.
Under normal circumstances, an injured employee’s only recourse will be workers’ compensation - they cannot sue you, their employer, directly. However, there are exceptions, and they have to do mostly with egregious or intentional employer behavior. Read on to determine whether you might be exposed to liability for injuries under any of these four theories.
If You Deny an Injured Employee’s Claim in Bad Faith, that Employee Can Sue You Rather than Go Through Workers’ Compensation
If you don’t believe an injured employee suffered a compensable injury, or that the injury was sustained at work, and you deny that employee’s workers’ compensation claim, a court can find that you did so in bad faith and order you to pay punitive (i.e., “punishing”) damages to the injured employee.
What is bad faith worker’s compensation claim denial? It is failing to investigate a claim and pay on the claim when the facts show that it was more likely than not that the worker was injured at work, and that the injury was severe enough to warrant medical treatment and missing work for at least seven days.
Workers’ Compensation Will Not Pay When the Worker was Injured Due to an Employer’s Gross Negligence, Recklessness, or Intentional Harm
An injured employee can reject their state’s workers’ compensation scheme and sue their employer in court when their injury resulted from something more than the employer’s mere negligence. Each state defines employer liability differently, but the terms gross negligence and recklessness are generally used to allow an injured employee to sue their employer outside of workers’ compensation.
For example, if the employee was injured attempting a task or using equipment that they did not receive training for, and the employer knew or should have known that the employee was not adequately trained, the injured worker could file a personal injury lawsuit against the employer.
If the employee was injured by equipment manufactured by the employer, the employee could sue the employer directly under a product liability theory.
If the employee was injured by equipment that was not adequately maintained, the employee might be able to sue the employer.
If the employer intentionally injured an employee, that is a crime as well as grounds for a personal injury lawsuit and, again, will not be dealt with through the state workers’ compensation scheme.
Workers’ Compensation Will Not Pay When the Worker Was Injured By a Coworker
If a fight breaks out between two employees and one is injured, the injured employee has grounds for a lawsuit against their assailant and perhaps against the employer if the employer knew of trouble brewing on the work floor and failed to take action to prevent violence.
If the Worker is an Independent Contractor, There is No Workers’ Compensation Coverage and that Worker Can Sue You
If you use independent contractors only and one is injured on the job, they can sue you personally if they can show that you are liable for the conditions that caused their injury.
In the alternative, they can take you to workers’ compensation court and argue that, for the purposes of the state workers’ compensation scheme, they should be considered “employees” and your workers’ compensation insurance should cover them.
If the injured worker convinces the court that they are an “employee” and not an independent contractor, you will likely pay punitive damages and also state fines and fees for failing to maintain workers’ compensation insurance.
Workers’ compensation and personal injury law are specific to each state, so if you have questions about employer liability for workplace injuries, whether you are an employer or an injured employee, be sure to consult a local workers’ compensation attorney.
About the Author: Veronica Baxter is a blogger and legal assistant working and living in the great city of Philadelphia. She frequently works with HGSK, bad faith insurance lawyers with offices throughout Pennsylvania.