Subrogation is one of the most important, complex, and least understood aspects of insurance claims. Investopedia defines subrogation simply as the general right that insurance companies have to “pursue a third party that caused an insurance loss to the insured.” At Yrulegui & Roberts, our firm has extensive experience handling a wide range of subrogation-related matters. Here, our Bakersfield workers’ compensation defense lawyer clears up three of the most common myths about subrogation in California.
Dispelling Three Common Misconceptions About Subrogation and Workers’ Compensation Claims
Myth #1: Subrogation is Rarely an Issue in Workers’ Compensation Cases
Contrary to a common belief, subrogation is not an uncommon aspect of workers’ compensation cases. When a third party is responsible for a workplace injury, the workers’ compensation insurer may pursue subrogation to recover the amount paid in benefits. Subrogation is a critical component of the workers’ compensation system, as it prevents double recovery by the injured worker and helps maintain the financial stability of the system.
Myth #2: It is Not Worth it for Insurers to Claim Reimbursement Through Subrogation
While it is true that some subrogation efforts may not be cost-effective for insurance companies, this is often not the case. Pursuing subrogation allows insurers to recover significant sums paid out in benefits, offsetting the cost of administering claims. Indeed, there are plenty of circumstances in which an insurer’s recovery through the subrogation process can be significant—especially in third-party liability claims. Subrogation can benefit a proactive, results-driven insurance carrier.
Myth #3: Insurance Companies Do Not Have to Take Action to Protect Subrogation Rights
Insurance companies must be proactive in protecting their subrogation rights to ensure they have the opportunity to recover payments made on workers’ compensation claims. Along with other steps, a subrogation strategy could involve putting third parties on notice, conducting a detailed- investigation, and working with a California workers’ compensation defense lawyer to pursue a recovery. Failure to take timely action can result in the insurer losing its subrogation rights, which can have significant financial consequences. Insurers may want to do one or more of the following:
- Notice of Lien: Insurance companies should file a formal notice of lien to inform all parties involved in a workers’ compensation case of their intent to pursue subrogation.
- Motion to Intervene: Insurers may need to file a motion to intervene in the injured worker’s lawsuit against the third party responsible for the injury.
- Assignment of Lien: In certain circumstances, insurance companies may choose to assign their lien to the injured worker, allowing them to pursue the third-party claim on the insurer’s behalf.
Contact Our Bakersfield, CA Workers’ Compensation Defense Attorney Today
At Yrulegui & Roberts, we are a workers’ compensation defense law firm that provides trustworthy services to employers and insurance companies. Do you have any specific questions or concerns about the matter of subrogation? Our legal team is here to help. Call us now or send us a message online to request your strictly confidential consultation. Our firm provides workers’ compensation defense representation in Bakersfield, Kern County, and all across Central California.
