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The role of subrogation for self-insured employers facing claims

Not all employers in New York choose to carry workers’ compensation insurance, although most companies have insurance obligations for their staff. If your business has certain financial assets, requires a small staff or operates in an industry with low risk for injuries or occupational illnesses, you could choose to self-insure instead of paying a premium for a workers’ compensation insurance policy.

Self-insurance can be beneficial, provided that no one does wind up hurt while working for your company. If workers do get hurt on the job or acquire occupational illnesses, you will have to cover their medical costs and lost wages or find someone responsible for covering them. 

The assignment of liability and financial responsibility to someone is where subrogation factors into your situation as a self-insured employer concerned about a pending workers’ compensation claim.

 What is subrogation?

It is the liable party whose insurance must cover the costs after an accident occurs. Subrogation is the industry term for when an insurance provider finds another party with liability for a claimant’s injury or losses and makes a financial claim against that company, person or insurance policy. 

Examples of subrogation could include a homeowner’s insurance company going after the local utility company for their contribution to a house fire that resulted in a massive loss. Medical insurance providers going after homeowner’s policies when someone falls down the stairs in a friend’s house is another example.

Knowing as much as possible about a situation that injured your worker can give you an idea about whether there are any third parties with potential liability or other insurance policies that may cover your costs.

You may need help with both your investigation and subrogation efforts

The process of looking into and documenting the circumstances of an injury is difficult to handle if you don’t have experience. Additionally, the process of taking that information and using it to make a claim against an insurance company is even more complex.

Getting help with the review of the claim against your company as a self-insured employer and subrogation attempts when there is obvious outside liability will increase your company’s chances of success and reduce the impact of a claim on your financial solvency.

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