One of the primary protections of Workers Compensation law is the "exclusive remedy" provision for employers. In exchange for providing coverage for work-related injuries, this provision generally prevents employees from suing their employer for those injuries, regardless of who was negligent.
There is, however, a way that liability can still reach the employer: the so-called "third party over." For example, imagine an employee is injured when scaffolding collapses. Workers' Compensation pays the employee's claim, so the worker typically cannot sue the employer directly; instead the worker sues the scaffolding company for defective equipment or improper installation.
If the worker obtains a judgment against the scaffolding company, that company may then sue the contractor or employer who hired it, alleging improper use or supervision of the scaffolding. In that way the employer can end up facing claims for damages arising from an injury to its own employee.
Yes — such suits are generally legal. Because the scaffolding company is not the injured person's employer, the employee may pursue a claim against that third party, and the third party may bring contractual or negligence claims against the employer.
Which policy responds — Workers Compensation or General Liability — depends on the factual and legal basis of the suit, so coordinating coverages is important. For more on employer obligations and claims handling, see Workers Compensation Law and Employer Responsibilities.
No single policy covers every risk, so carrying multiple, coordinated policies gives more complete protection. A claim that falls just outside one policy's scope can become a coverage gap unless policies are managed together; for more on coverage coordination and additional insured issues see Workers' Compensation Insurance and Additional Insured Requests.
Keeping your insurance umbrella current and coordinated can be complex, but that is what an agent can help with. If you'd like personalized guidance, ask an agent to review how your policies work together.
Frequently Asked Questions
Can an injured employee sue a third party after receiving Workers' Compensation benefits?
Yes. An employee who receives Workers' Compensation benefits can generally sue a non-employer third party whose negligence contributed to the injury.
Can the third party then sue my company?
Yes. A third party that is found liable to the employee may pursue claims against the employer, often alleging negligence or contractual breach related to the jobsite.
Which insurance pays if a third party sues my company after an employee injury?
It depends on the basis of the third-party claim; either Workers Compensation or General Liability may respond, so insurers will examine the claim details and policy language.
How can I reduce the risk of coverage gaps?
Maintain coordinated policies, confirm additional insured endorsements when hiring contractors, and review coverages periodically with an insurance professional.