You own or run a successful, small or medium-sized business. You know that the workplace risks in your industry are ultimately quite low and your business has been successful, so you decide to self-insure against worker injuries.
Businesses in New York that qualify can self-insure for workers’ compensation purposes rather than needing to pay a monthly workers’ compensation premium to an insurance company every month for a policy that they expect to never make a claim against.
Self-insurance can help you keep your costs low up until a worker needs to make a claim because of a medical issue. Determining if there is another party ultimately at fault for that injury can give you an opportunity to subrogate any claims your workers make. How does subrogation work?
Subrogation involves making a claim to an insurance company
As a self-insured employer with an injured worker who needs medical care or disabilty benefits, you have an obligation to cover that worker. However, there could be other parties that also have an obligation to that injured worker or to you because you’ve covered their losses and expenses. Subrogation is the technical term for seeking some kind of third-party compensation for benefits you’ve paid.
Subrogation often involves insurance companies holding each other responsible for issues that affect their policyholders. For you as a self-insured business, this process would likely involve identifying insurance policies that might apply given the nature of the incident or looking at whether there is someone with legal fault or responsibility for what happened.
For example, you could make a claim against another company’s insurance if they provided you with a defective tool. If your worker got hurt on the job while driving, you might be able to make a claim against the other driver’s insurance.
Identifying fault and liability is crucial to successful subrogation
You need to carefully consider the circumstances that led to your worker’s injury. Sometimes, third-party liability isn’t glaringly obvious, but you can potentially make a claim once you identify who might ultimately be at fault for the injury or worker suffered and who may have insurance that applies.
Having help during the process of analyzing your situation can increase your chances of successfully subrogating a claim when a worker needs compensation for lost wages and injuries.