A Workers’ Compensation Dilemma
What happens when a worker injured in a third-party settles a personal injury claim with a liability insurer before receiving BWC benefits?
This question was answered earlier this year by the Supreme Court of Ohio in Bur. of Workers’ Comp. v. Verlinger, 153 Ohio St.3d 492, 2018-Ohio-1481. In Verlinger, the insurer failed to notify the BWC of its subrogation interest resulting from settlement payments to an injured worker involved in an on-the-job car accident. The Court ruled the insurer was liable to the Ohio BWC for any past, current or future payments made by the Ohio BWC per the injured worker’s BWC claim. In reaching its decision, the Court explained that Ohio Revised Code 4123.931 provides the Ohio BWC a subrogation interest in all payments from a responsible third-party to an injured worker for damages arising out of a work-related injury and requires the third-party payer give the Ohio BWC notice of its payments and subrogation interest.
Third-party liability insurers
More specifically, the liability insurer for the driver who caused the on-the-job motor vehicle accident settled with the injured worker before the injured worker filed a workers’ compensation claim. However, the liability insurer failed to notify the BWC of its settlement payment and resultant subrogation interest. The Court ruled the Ohio BWC’s subrogation rights vested when the injury occurred rather than after the workers’ compensation claim was allowed and payments were made. As a result, the Court’s ruling makes it clear that third-party liability insurers making payments for injuries and damages from an on-the-job accident must provide prompt notice of its subrogation interests to the Ohio BWC. Otherwise, the liability insurer can be jointly and severally liable with the injured worker for any and all payments subsequently made by the Ohio BWC under the workers’ compensation claim.