Does workers comp effect your entitlement to liability and unisured motorist benefits?

Many people are injured while drving in their work. When such an injury is because of the negligence of other drivers, our clients can collect both workers comp benefits and make claims for their crash injuries against the liability coverage of the at-fault driver and even potentially against their own uninsured motorist coverage.

How does this all work? Can you collect twice? The answer is yes and sort of. Workers Compensation benefits take care of many things promptly, such as medical bills, prescriptions, lost time from work (In Maryland Temporary Total Disability) and ultimately in some instances, so-called permanent partial or total disability.

Comp is paid without regard to fault and originated to protect workers and their families from the potentially disasterous consequences of a bad work accident. It does not however compensate the worker for pain and suffering.

As an illustration, Mary drives a Metro bus and while working is in a bad crash with a dump truck. She is taken to Prince Georges Hospital with a broken leg and a variety of other lesser medical issues. She notifies her employer and Metro or its workers comp insurer pay Mary's causally related medical bills, pay her prescriptions and pay her while she is unable to work.

She also has a claim against the liability insurer for the dump truck. Unlike workers comp, the liability carrier doesn't pay bills or lost wages when they accrue but rather when Mary has reached maximum medical improvement and is back to work, the liability carrier will look at all the effects on Mary including the amount of her medical bills, lost wages and her likely pain and suffering.

Often in major collisions, all the workers comp benefits have long ago been paid to Mary before the liability carrier for the dump truck considers its ultimate offer for settlement. So, if the liability insurer includes Mary's lost wages and medical expenses in their offer and her bills  and lost wages were paid by the workers comp insurer, isn't Mary collecting them twice?

The answer is sort of. Under prevailing Maryland law, the workers compensation insurance company has a lien on Mary's liability settlement. What does that mean?

Again by way of example, Mary's workers comp lost wages plus medical bills is $50,000.00. She settles her liabilty case for $150,000.00 and the workers compensation insurer gets the first $50,000.00 of Mary's settlement by law.

Except they don't quite. Mary's liability lawyer charged her a 1/3 of her $150,000.00 settlement and that same fee arrangement applies to the workers comp lien. So Mary gets the benefit of the $50,000.00 workers comp benefits but pays back only $33,333.00.

The basic rule is that workers comp insurers get paid back out of liabilty coverage except when uninsured or underinsured motorist coverage comes into play. Oddly, in that scenario, the uninsured/underinsured motorist carrier gets the benefit of a reduction in what they are obligated to pay equal to the amount or workers comp the injured party received.

Confusing isn't it? Call lawyer, you'll do better.