Workers’ Compensation Lawsuit: When Can You Sue? Sep 2024

Can You File a Workers’ Comp Lawsuit?

Workers’ compensation is based on a simple premise: your employer pays the insurance premiums for a workers’ comp policy so that you can claim benefits after you suffer an on-the-job injury or occupational illness.

However, workers’ comp is your exclusive remedy for work-related injuries and illnesses. Your employer is immune from any lawsuits by injured employees. If you file a workplace accident lawsuit against your employer for a work-related injury, a judge can dismiss the case as long as your employer has complied with workers’ compensation laws.

Nevertheless, workers’ compensation lawsuits against your employer, its workers’ comp insurer, and third parties may be available in narrow situations. These lawsuits can result in compensation that could not be received through a normal workers’ comp claim. Take a closer look at what situations may call for this type of lawsuit.

Grounds for Filing a Workers’ Compensation Lawsuit

The term “workers’ compensation lawsuit” is somewhat of a misnomer because the purpose of workers’ comp is to eliminate the burden of lawsuits on both injured workers and their employers.

Instead, it may be more useful to think of these as lawsuits involving injuries eligible for workers’ compensation that can also open the door to a lawsuit. There are four parties that you might have the right to sue after suffering a work injury.

Employer Lawsuit

Despite the common wisdom that you can never sue your employer for a work injury, there are a few rare situations where you may have grounds for a lawsuit. For example, if your employer violated your state’s workers’ compensation insurance requirements and failed to buy a policy, it lacks immunity from lawsuits, and you can pursue a negligence claim.

Similarly, under Texas’s voluntary workers’ comp system, non-subscribers can legally choose not to participate in the system. However, they leave themselves exposed to lawsuits by employees for work-related injuries and illnesses.

Employers with workers’ compensation policies typically have immunity from employee lawsuits for injuries, but most states provide exceptions. Employees can usually sue their employer for injuries intentionally inflicted on them by the employer. Some states also allow workers to sue employers for injuries resulting from knowingly or intentionally violating safety rules and laws, like OSHA regulations.

Co-Worker Lawsuit

In most states, you cannot sue co-workers who injure you while acting within the scope of their job duties. This immunity has limits, though. For instance, co-workers are liable for intentional injuries. They may also be liable for injuries that resulted from a prank or horseplay.

Workers’ Comp Insurer Lawsuit

Workers’ comp insurers are generally not liable for their claim decisions. When an insurer denies your claim, you can request a hearing to try to have the denial reversed rather than suing the insurer. However, there are reasons to sue workers’ comp insurers other than an adverse claim decision.

All insurers must follow your state’s Unfair Claim Settlement Practices Act. These laws define what insurers cannot do when handling a claim. The act also sets out how to sue workers’ comp insurers that mishandle claims. When an insurer violates this act, you have the right to file a bad-faith insurance claim.

This type of claim comes from an insurer’s duty to act in good faith to settle claims once liability is reasonably clear. If an insurer persists in denying the claim or refusing to pay after a reasonable insurer would have paid, it has acted in “bad faith.”

A bad faith claim operates separately from the underlying workers’ comp claim. In other words, you still receive your workers’ comp benefits, but the insurer must also pay for any damages above that amount caused by its bad faith conduct. For example, if your injuries prevented you from working because the insurer denied treatment in bad faith, your damages can include your lost wages.

Can you sue workers’ comp for emotional distress, though? The answer is yes, as your compensation after winning a bad-faith insurance claim can include compensation for emotional distress and other non-economic losses.

Third-Party Lawsuit

You can pursue third-party claims against any party that caused your injury other than your employer. For example, suppose that you developed cancer from exposure to glyphosate pesticides while working for a farm. You cannot sue the farmer because your exclusive remedy from your employer is workers’ comp. However, you can pursue a product liability claim against the product’s manufacturer.

Can you sue if you accept workers' compensation? Yes, you can. Remember that workers’ compensation benefits only cover part of your wages and none of your pain and suffering. You can use a third-party lawsuit to seek a personal injury settlement or damage award for any unreimbursed wage losses, as well as non-economic losses.

Contact ConsumerShield to Learn More About Filing a Workers’ Compensation Lawsuit

A workman comp lawsuit is unusual because most claims are accepted and paid. Even those that are denied will typically trigger a hearing rather than a lawsuit. Still, some cases involve unique facts that can support a lawsuit.

These lawsuits open the door to recovering compensation for all your losses, including non-economic losses that would not otherwise be available in a workers’ comp case. ConsumerShield can refer you to a lawyer who can help you with yours. Contact us for a free case evaluation today.