Carrying workers’ compensation insurance helps protect a small or medium-sized business from the potentially devastating expenses of a worker’s injury. However, large claims against the policy your business carries could increase your operating expenses.
Whether you self-insure as permitted under New York law or you carry a policy provided by an outside company, a worker making a claim for disability benefits and medical coverage could lead to significant financial losses for your company. If subrogation is possible, it could potentially help defray those expenses.
How subrogation works
In insurance law, claim subrogation refers to the process of filing a claim against another policy because there is an outside party with liability. Such claims are often very complex and require an assertive approach. A careful review of the circumstances will be the only way to determine if there might be a third party with liability or an insurance policy that may cover the losses reported by your worker.
Subrogation is common practice not just in the workers’ compensation world but also with homeowners, automobile and health insurance policies. For example, a health insurance company typically won’t pay for medical care related to a car crash until the person they cover has exhausted the car insurance available to them. If the insurance company does pay, it will go back to the car insurance company to request compensation.
Subrogation claims are frequently very complex and will require both evidence related to the incident and also an understanding of New York insurance and personal injury law.
Handling subrogation alone may not work
Many business owners, including those that self-insure, may put themselves at a disadvantage by attempting to handle complex legal and financial matters without the proper support. Subrogation claims are often too complicated for the average person to handle. They require an understanding of how insurance claims and state law function.
Without the right support, you might make mistakes in the process that delay the resolution of the claim or ultimately result in your failure to recoup the expenses for the workers’ compensation claim. Exploring all of your options for limiting the costs related to an employee’s recent workers’ compensation insurance claim will help your company meet its obligations without suffering major financial hardship.