Self-insurance for workers’ compensation can be a cost-effective solution for New York employers. Provided that you have been in business for long enough and have adequate resources to qualify for self-insurance, you can avoid the recurring costs of a workers’ compensation insurance policy.
Unfortunately, those savings can evaporate immediately if a worker gets hurt and needs medical care or disability benefits. Your business will have the responsibility of paying for those costs in most cases. However, you might be able to defray some of those expenses if there is another insurance policy that might cover the situation.
You can pay your worker and then subrogate the claim
You likely won’t want to take the legal risk of denying or delaying payment for a worker’s medical care or lost wages. What you can do is cover them in compliance with your obligations under New York law and then determine whether other insurance policies might repay you.
Subrogation is the technical term for when insurance providers make claims against one another. As a self-insured business, you may be able to make a claim against an individual or business insurance policy.
For example, if your worker was hurt on the clock while transporting materials for your company, the car insurance policy of the driver who hit your employee might reimburse you. If your worker was a door-to-door salesperson and slipped and fell on the stairway in an apartment building, the premises liability policy for the landlord could reimburse you.
Understanding your right to seek reimbursement as a self-insured employer can help you minimize the financial impact of a worker’s injury on your business.