Car accident


Workers’ Compensation Carrier’s Right to Subrogate UM/UIM Benefits

Every state has a system of workers' compensation to provide benefits for workers injured on the job. These benefits are paid regardless of negligence. Where the work-related injury is the result of the negligence of a third-party, most states grant the employee a right to pursue the third-party for damages resulting from the injury and give the workers' compensation carrier subrogatable interest with the idea of preventing a double recovery to the employee.

Employer Casualty Company was the workers' compensation carrier for Carl Dyess Jr., who was injured on August 14, 1990, while driving a truck in the course and scope of his employment. Dyess was injured when he was struck by an uninsured motorist (UM) and subsequently collected more than $100,000 in workers' compensation benefits.

Dyess sued the uninsured motorist and also sought uninsured motorist benefits from Northbrook Property and Casualty Company, his employer's uninsured motorist carrier.  At that time, the case of Bogart v. Twin City Fire Insurance Co., 473 F2d 619 (5th Cir. 1973), interpreting Texas law, had clearly stated that a workers' compensation carrier's subrogation rights do not extend to uninsured motorist coverage.

The court of appeals held that employers could subrogate against UM benefits because its subrogation rights under the statute applied to any party who was liable for the employee's injury, regardless of whether that liability arose in tort or contract. This case changed Texas law allowing workers' compensation carriers to subrogate against UM and underinsured motorist (UIM) benefits.

To learn more about workers’ compensation carrier’s rights, contact one of our Risk Management team members at 800-399-6059 or visit us online.


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