The average person spends 90,000 hours at work during their lifetime — that’s about a third of your entire life — so it’s no surprise that many accidents happen on the job.
You don’t have to work in a particularly dangerous industry, either. Injuries in locations like construction sites and warehouses are frequent, with risk factors including falling from a height, working with malfunctioning machinery, and exposure to hazardous materials. However, an accident can happen at any time — and in any work environment.
An astonishing number of work accidents — 40%, according to recent data — happen on the road, such as while travelling to meet clients or doing a delivery run.
Even the confines of a typical office environment aren’t without their hazards. Employees slip on wet reception-room floors, trip over poorly laid carpets, and develop repetitive strain injuries from improper office setups.
But when an employee is injured at work, could you be held responsible? The reality is that an employee could pursue a claim against you. Whether that’s a workers’ compensation claim or a potentially costly personal injury claim depends on your jurisdiction and the facts of the specific case.
What Is Workers’ Compensation and How Does It Differ from a Personal Injury Claim?
As a business owner, you likely already know if you have workers’ compensation (or workers’ comp) insurance. In all states but Texas, workers’ compensation is mandatory, although each state has its own rules regarding this insurance. In some states, you only need workers’ compensation if you earn over a certain amount in revenue or employ more than a handful of employees.
That said, even if you aren’t required to take out workers’ comp, it can be a wise move, as it protects you from liability and covers your injured employee’s wages and medical expenses while they recover.
It’s also worth noting that employees typically can’t file a personal injury claim if they’ve received a workers’ compensation payout. There is an exception, which we’ll cover shortly.
This is important, as a successful personal injury claim can result in you paying out a settlement far more substantial than the cost of workers’ compensation insurance.
So what’s the main difference between a workers’ compensation payout and a personal injury claim?
At first glance, they might appear similar. Both types of claim cover:
- Medical expenses incurred to treat the injury, such as costs of surgery, medication, and general treatment.
- Lost wages for time required off work.
However, that’s where the similarities end.
A personal injury claim can often result in a high settlement because of so-called non-economic damages. These are designed to compensate injury victims for pain and suffering, mental anguish, and loss of enjoyment, such as if a spinal cord injury prevents an individual from participating in sports or other activities that bring them joy.
A workers’ comp claim only covers the economic losses listed above.
The burden of proof in a personal injury claim is also higher. In this type of claim, an employee or contractor must show:
- The party owed them a duty of care
- The party breached that duty of care through recklessness or negligence
- The breach caused the injury
- The injury resulted in quantifiable losses (such as medical expenses, etc.)
A breach could be anything from being made aware of a trip hazard and not getting it fixed promptly or providing an employee with faulty equipment.
In a workers’ compensation claim, an employee only needs to prove that the accident occurred at work — negligence doesn’t come into play.
The distinction between workers’ compensation claims and personal injury claims is crucial, as an employee may be able to file a personal injury claim if you do not have workers’ compensation insurance. They will need to meet the higher burden of proof, but if they can, you may face a hefty payout or be drawn into a tedious court battle.
Claiming Workers’ Compensation and Personal Injury Compensation
We’ve already established that if you have workers’ compensation and your employee is injured at work, they cannot receive a workers’ compensation payout and then file a personal injury claim against you, even if they believe you were negligent.
But that doesn’t mean they can’t file a personal injury claim at all.
An employee might choose to file a personal injury claim against a third party if they can meet the burden of proof.
For example, you might employ a construction worker who loses a limb while using a faulty piece of equipment. Assuming you have workers’ compensation insurance, you can file a claim to cover their lost wages and medical expenses with your insurer. Your employee could then sue the manufacturer of the faulty equipment for breaching its duty of care towards them to claim additional compensation.
This would have no bearing on you, as your employee cannot sue you.
What to Do If Your Employee Is Injured at Work?
What you should do if your employee is injured at work largely depends on whether or not you have workers’ compensation insurance.
If you have workers’ comp, an employee should tell you about their injury and seek medical attention. They must do this within a strict time frame, ranging from a few days to several months, depending on the state.
You must then inform your insurer about the accident. The Workers’ Compensation Commission in your state will review the case and determine how much compensation if any, your employee is entitled to.
If you do not have workers’ compensation insurance, your employee may decide to file a personal injury claim. To successfully claim compensation, they must prove negligence or recklessness. This is a long process involving collecting witness testimony, medical records, site examination reports, and more.
Your employee will be within their rights to hire a personal injury lawyer to handle their case and negotiate the highest possible settlement. You should also seek legal advice, as a large compensation payout could impact your business.