Learn when and why waivers of subrogation
are used and how they can affect your claim
after a work injury in Charlotte
A waiver of subrogation, a common clause in many construction contracts in North Carolina, can significantly impact injured workers’ rights and the compensation they receive. But what exactly is it, and how does it affect your ability to seek damages after a workplace injury?
This article will delve into the purpose of a waiver of subrogation, its implications for injured workers in North Carolina, and crucial steps to take if you’ve been injured on the job.
What is a waiver of subrogation?
In simple terms, a waiver of subrogation is an agreement where one party waives their right to seek reimbursement from another party for losses paid by insurance.
For example, if a subcontractor’s employee gets injured and the subcontractor’s insurance pays for the injury, a waiver of subrogation would prevent the subcontractor’s insurance company from going after the contractor to recover those costs.
What is the purpose of a waiver of subrogation?
Many construction contracts include a waiver of subrogation clause as a standard provision due to industry norms and the desire to clearly define responsibilities for workers’ compensation coverage. A waiver of subrogation is primarily used to manage risk and assign responsibility among different parties in a contract when an injury occurs, especially in high-risk fields like construction that use subcontractors.
Its main benefits include:
- Facilitating business relationships. The waiver helps maintain positive business relationships by eliminating the potential for lawsuits among partners in a project. This can lead to smoother operations and fewer disruptions caused by legal disputes.
- Controlling costs. General contractors benefit from waivers of subrogation because they help shield them from financial liability by minimizing their exposure to claims if a subcontractor’s employee is injured. However, this typically means the subcontractor’s insurer absorbs the full cost, which can lead to higher insurance premiums for the subcontractor.
In general, contractors may choose to have subcontractors sign a waiver of subrogation to avoid legal conflicts, control costs, and streamline the claims process.
Does a waiver of subrogation prevent a worker from filing a claim against a third party like a contractor?
No, a waiver of subrogation does not prevent a worker from filing a claim against a third party, such as a contractor. It only prevents the subcontractor’s workers’ compensation insurance carrier from seeking reimbursement from the third party for the benefits paid to the injured worker.
This means the injured worker can still pursue a personal injury lawsuit against the contractor or any other responsible third party for additional damages beyond what’s covered by workers’ compensation.
The waiver of subrogation mainly affects the workers’ comp insurer’s ability to recover costs, not the employee’s right to seek compensation from other parties.
What To Expect After Hiring a Workers’ Compensation Lawyer
Get a detailed overview of the workers’ compensation claims process in North Carolina—from calling an attorney to taking your claim to court.
How might a waiver of subrogation benefit an employee who gets injured as a subcontractor?
A waiver of subrogation can significantly benefit an injured subcontractor employee by allowing them to maximize their compensation without having to repay the workers’ compensation insurer from their third-party recovery. Here’s how:
- Double recovery. When a waiver of subrogation is in place, the workers’ compensation insurer relinquishes their right to recover costs from any third-party settlements or verdicts. This means that the employee can keep the full amount of any compensation received from a third party, such as a contractor, without having to repay the insurer for the workers’ comp benefits they’ve already received.
- Increased settlement amount. The absence of a lien from the workers’ compensation insurer can lead to higher settlement amounts. Third parties may be more willing to settle for larger amounts, knowing that the settlement will fully benefit the injured worker, rather than being reduced to repay the insurer.
- Simplified legal process. The legal process becomes less complicated when the insurer is not involved in recovering costs from the settlement. This can make the litigation process more straightforward for the injured employee and their attorney.
Here’s an example:
Imagine a subcontractor named John gets injured on a construction site. He receives workers’ compensation benefits, including medical expenses and wage replacement. John also files a third-party claim against the general contractor responsible for the site, alleging negligence.
- Without a waiver of subrogation. If John wins a $100,000 settlement from the general contractor, the workers’ compensation insurer could place a lien on this amount to recover the $30,000 they paid in benefits. This means John would end up with $70,000 from the third-party settlement, minus any legal fees.
- With a waiver of subrogation. If there is a waiver of subrogation in place, the insurer cannot recover the $30,000. John keeps the entire $100,000 settlement, minus legal fees, in addition to his workers’ comp benefits, resulting in a significantly higher net recovery.
In this scenario, the waiver of subrogation directly benefits John by allowing him to retain a larger portion of the third-party settlement, providing better financial support for his recovery and future needs.
What should I do if I’m injured as a subcontractor in North Carolina?
If you’re injured as a subcontractor in North Carolina, there are several steps you should take to increase your chance of a successful workers’ comp claim and maximize your compensation:
- Report the injury immediately. Notify your employer as soon as possible after the injury occurs. North Carolina law requires that you report your injury to your employer within 30 days. Failing to do so could jeopardize your ability to receive benefits.
- Seek medical attention. Get medical treatment right away and inform the health care provider that your injury happened at work. This documentation is essential to proving your injury is directly related to your job.
- File a workers’ compensation claim. Submit Form 18 (Notice of Accident to Employer and Claim of Employee, Representative, or Dependent) to the North Carolina Industrial Commission within 2 years of the injury. This formalizes your claim and is a crucial step in receiving benefits.
- Understand your benefits. Know the types of benefits you’re entitled to under North Carolina workers’ compensation law, which include:
- Medical benefits. These benefits cover all necessary medical treatment related to your injury.
- Wage loss benefits. These benefits typically provide two-thirds of your average weekly wage while you recover.
- Vocational rehabilitation benefits. These benefits provide assistance with job retraining or education if you’re unable to return to your previous position.
- Consult a workers’ compensation attorney. If you’re injured as a subcontractor and you believe a third party (like a contractor) is responsible for your injury, it’s essential to consult with an experienced Charlotte workers’ compensation attorney who can help you understand your legal options and how any clauses in your contract might affect your claim.
Please note that workers who file third-party claims may be entitled to additional compensation for pain and suffering and other damages that are not available through workers’ comp.
By taking these steps, you can enhance your chances of receiving the full compensation you’re entitled to as a subcontractor in North Carolina after a work injury.
Get help from an experienced work injury attorney in Charlotte
If you’ve been injured in a workplace accident in Charlotte, don’t navigate the complex legal system alone. Wilder Pantazis Law Group is here to help you understand your rights and options for pursuing the compensation you deserve.
With over 85 years of combined experience, our knowledgeable attorneys have the skills and dedication to fight for you, whether through a workers’ compensation claim or a lawsuit against a third party.