The Difference Between Workers’ Compensation Claims and Personal Injury Lawsuits

Workers’ compensation is a type of insurance employers purchase to cover employees if they get injured on the job. It provides protection if the worker gets hurt during the normal course of their duties. If a covered injury does occur, the employee can file a workers’ comp claim through their employer to access payment for lost wages, assistance with medical bills, and related benefits. Most employers are required to have this type of policy. They cannot legally hire workers without such coverage. 

Personal injury cases, on the other hand, are lawsuits. While workers’ comp claims cover unintentional accidents that occur at the insured worksite, personal injury cases require a defendant who is at fault, and typically are litigated in situations where workers’ comp is not available or provided to the injured party. 

The actual legal proceedings for both workers’ comp and personal injury cases can vary by state. For insurance claims, you may need to prove that you were hurt during the regular course of work, while personal injury cases require evidence that someone caused the accident purposely or through negligence. 

In some cases, you can file both a claim and a lawsuit simultaneously. 

Workers’ Comp Claims

Workers’ compensation claims do not require fault. If you slip and fall while at work and break your arm, you do not need to prove anyone was at fault to receive your workers’ compensation benefits.

You can still get benefits even if you were responsible for your injury. There are limited exceptions to this rule. For example, the insurer may investigate if they think you were under the influence of alcohol or drugs when the incident occurred. In such cases, the employer or insurer may attempt to deny workers’ compensation benefits. If your claim gets denied, you can hire a lawyer well-versed in workers’ compensation benefits to act on your behalf. 

There is a caveat to workers’ compensation benefits; you cannot sue your employer or co-workers for personal injury once you receive workers’ compensation benefits. 

This means that you are guaranteed compensation and medical benefits through the workers’ comp policy. However, you must agree not to pursue personal injury damages, which often pay more than a similar workers’ comp claim (though a lawsuit is typically a much longer process than workers’ comp claims). 

In some instances, you can sue an employer. If the company fails to maintain insurance, an injured employee can sue them in a personal injury suit. Not having coverage may, in many cases, may mean the employer is “at fault.”  

Similarly, if the employee and their lawyer can prove that the injury happened because of the negligent acts of a third party (such as a manufacturer or contractor), they can sue that person or company. You can file this case even after receiving workers’ compensation benefits. The “third party” cannot be your employer or their direct employees. They are covered by the insurance policy

Personal Injury Lawsuits

Personal injury claims require fault. As the complainant, you will have to prove that another party acted negligently and caused your injury. Personal injury claims are more general, and they do not necessarily have to be work-related. 

When you accept workers’ compensation benefits, you forfeit your right to sue your employer or any direct co-workers. However, you may still have a personal injury case if you’re injured while working, but you would have to prove that the injury was caused by the negligence of a third party. 

Below are some examples of instances when you could file a lawsuit because of a work-related injury. You could file a lawsuit if:

  • Your injury happened because of a defect in a product. In this case, you may file a claim against the manufacturer of the product.
  • Your employer intended to cause harm. In these cases, you need to prove intent. 
  • Your injury happened due to the negligent actions of a boss or employee under the influence of drugs or alcohol. 
  • Your injury was due to the negligence of a third party. The defendant cannot be another company employee or the company itself.

These exceptions to the rule show why it is essential to consult a personal injury lawyer, even if you believe your case is a simple workers’ compensation issue. 

Once proceedings begin for a personal injury claim, they go through a well-defined legal process, from discovery to settlement. The cases may be settled either by an arbitration agreement or by trial.

Workers’ Comp vs Personal Injury Damages

The main difference between damages under a workers’ compensation claim settlement vs. a personal injury claim is that one cannot claim damages for pain and suffering through a workers’ compensation claim. Workers’ compensation coverage mainly includes these monetary benefits:

  • Medical bills.
  • Lost wages and expenses while undergoing treatment.
  • Permanent disability costs.
  • Compensation for vocational rehabilitation, whether it’s to get back to work or start a new career.

A personal injury claim, on the other hand, entitles the complainant to all costs associated with an injury. The damages can include:

  • All past and future medical bills.
  • Lost wages while undergoing treatment.
  • Permanent impairment costs.
  • Vocational rehabilitation.
  • Pain and suffering.
  • Punitive damages.
  • Reduced quality of life.

You can even claim damages on behalf of your spouse (not being able to relate with your spouse or perform spousal duties due to the injury) and get compensation for lost future earning capacity.

There is a trade-off with personal injury claims, however. Workers’ compensation benefits are typically timely and often begin arriving within days of the incident. While a personal injury claim entitles you to potentially much more, a full legal case can drag on for years before reaching a settlement.

Legal Proceedings for Claims vs Lawsuits

The process of claiming workers’ compensation benefits begins with informing your employer of your injury. You then fill out the relevant forms to start the process with the insurance company. 

The insurer will then perform an investigation into the case. Based on their findings, they will approve or deny the claim. If you then wish to appeal the decision, you can file a petition with your state’s Department of Labor. A lawyer can provide specific guidance for your state since laws can vary slightly from place to place. 

In many states, workers’ compensation claims follow a separate legal system with specialized courts. Workers’ compensation judges are different than those handling personal injury claims.

When filing a personal injury lawsuit, you should file in the appropriate court in your state. Consulting a personal injury lawyer will help you go about the process the right way.

Combination Cases

A combination case is when an employee has grounds to claim both workers’ compensation benefits and pursue a personal injury claim against a liable third party. In these cases, the complainant may pursue two separate claims through two different court systems. If you decide to go through a personal injury lawsuit, you will have to prove that a third party is, in fact, liable for your workplace injury

Because of these challenges, you should consult a lawyer well-versed in both workers’ compensation and personal injury cases before pursuing a combination case.

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