When an employee is injured on the job, they can either file a workers’ compensation claim or a personal injury lawsuit, but many people don’t understand the difference between the two.
Workers’ compensation overview
Generally, a worker who was injured on the job will file a workers’ compensation case, although there are times when it might be in their best interest to file a lawsuit instead. It is important to note that workers’ compensation was established to protect both the employer and the employee, and to eliminate the need for litigation.
Workers compensation is an insurance policy administered by the workers’ compensation boards of individual states. There is also federal workers’ compensation insurance for federal employees that is administered by the federal government.
Under workers’ compensation law, benefits are available to a worker who is hurt on the job, and no proof of fault needs to be made for benefits to be paid. All that needs to be established is that the injury occurred on the job and is connected somehow with the work the employee performed.
Under workers’ compensation, an injured employee receives non-taxable income equivalent to about two-thirds of their average wage on a weekly or bi-weekly basis. They also receive medical care for their injury, compensation for a permanent injury, and reimbursement for any necessary job retraining.
Benefits are also available to survivors of those who are killed on the job. In exchange for these benefits, the employee gives up the right to sue the employer for personal injury, except in very specific circumstances.
Personal injury overview
Personal injury lawsuits are not limited to any specific class of people. Anyone who is injured due to the negligence of another may bring a personal injury lawsuit, but in order to recover damages, the injured party must prove that another person was at fault, or negligent, and caused his injury. The injured party, or plaintiff, must also show proof of the amount of damages that resulted from the injury, and request payment from the defendant to “make him whole again.”
Personal injury damages or settlements are compensatory, and usually include property damage, medical expenses, lost wages and loss of future earning capacity. If applicable, plaintiffs may also demand damages for pain and suffering resulting from the injury.
Key areas of overlap
The purpose of both workers’ compensation and personal injury lawsuits is to provide compensation to injured individuals, and although there are differences between the two, there are also areas of overlap. Workers’ compensation can provide monetary awards to those injured on the job without litigation, but there are some instances when injured workers may be able to bring a personal injury case. These include:
- Injuries involving a defective product, in which a products liability lawsuit may be brought against the product’s manufacturer
- Injuries involving a toxic substance, in which a toxic tort lawsuit may be brought against the manufacturer of the toxic substance
- Injuries occurring as a result of an employer’s intentional or egregious conduct
- Injuries occurring in a workplace in which the employer is not required to carry workers’ compensation insurance, or is required but has failed to do so
- Injuries intentionally caused by an employer or fellow employee
- Injuries caused by the negligence of a third party, someone other than an employer or a co-worker
Where the injury occurs
While workers’ compensation laws cover workers who are injured on the job, if a worker is injured outside the course and scope of his employment, he is not usually afforded coverage under workers’ compensation. This does not mean, however, that he is only covered for injuries occurring at his principal place of work. Employees who are required by their employers to perform work-related activities in other locations, such as construction workers and road maintenance crews, are usually covered by workers’ compensation, as long as the injury occurred while they were engaged in duties related to their employment. Commuting to and from a work site and lunch breaks may be examples of non-work related duties.
Personal injuries can take the form of automobile accidents, slip and falls, dog bites, and injuries suffered in unsafe or dangerous workplaces. Personal injury lawsuits may be brought by any injured person, regardless of where the injury occurred. The key is not where the injury occurred, but whether or not it was due to the negligence of another person.
Fault and negligence
Workers’ compensation benefits are typically paid without determining who is at fault for the employee’s injury, and fault is almost never an issue. It is only when an employee’s injury is due to an intentional act of the employer or a coworker, or when an employer violated regulations regarding safety in the workplace, that fault comes into play.
In a personal injury matter, on the other hand, fault plays a major role in determining liability. Not only must fault be proven, a third party’s fault must have been the cause of the plaintiff’s injury and resulting damages. If fault cannot be established, no liability can be proven, even in the case of a serious injury. Similarly, if the plaintiff suffered no damages, there is nothing to base an award on, even if another party was at fault.
Lawyer costs and fees
Workers’ compensation cases are usually handled on a contingency fee basis, meaning your lawyer will get a percentage of your workers’ compensation benefits or settlements if you win your case. If you lose, there is no fee. State workers’ compensation boards regulate the percentage, and it’s less than 25 percent in most states. Attorneys are also allowed to recover the costs associated with handling the case, which may include the charges related to required medical exams, depositions and administrative costs for copying, postage and telephone calls. Workers’ compensation typically pays the medical costs associated with the injury directly to the medical providers.
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Personal injury attorneys usually require clients to sign a retainer agreement that outlines the attorney fees and costs that the client will be required to pay when the case is finalized, either through settlement or litigation. Many personal injury attorneys receive one-third of the award if the case settles before it is filed in court. Some attorneys negotiate with medical providers and handle the payment of all the client’s injury-related medical bills for them. Others disburse the award, after all legal fees and costs are deducted, directly to the client, who is expected to pay off his own medical bills.
Awards and settlements
Although workers’ compensation provides monetary as well as other benefits to an injured worker, the awards can be quite low compared to those given in a personal injury lawsuit, and workers’ compensation does not cover damages such as pain and suffering.
Most states do not have caps on compensation in personal injury cases, and awards may reach hundreds of thousands or even millions of dollars — but there are no guarantees. A plaintiff’s recovery is based upon whether or not negligence can be proven, the amount and nature of the damages, and, if the matter goes to trial, the discretion of the jury.
Filing process, procedures and timing
Most injured workers receive workers’ compensation benefits in a timely manner — often within days of the injury — but some with more serious injuries, or a less-cooperative employer, may find it necessary to file the claim with their state’s workers’ compensation board.
The filing of a workers’ compensation case can take place with or without the help of a workers’ compensation attorney. In most states, settlement conferences are held before a workers’ compensation case is scheduled for a hearing. If a settlement cannot be reached during the conference, the case will be set for hearing before a workers’ compensation judge.
Personal injury cases may be commenced immediately after an injury or any time up until the statute of limitations has expired; this timeframe varies from state to state. Because of the sometimes complex nature of the case and the negotiation skills that are often required in a personal injury case, the assistance of a personal injury attorney is usually necessary. If the matter cannot be settled out of court, the plaintiff’s attorney will file paperwork that commences the lawsuit.
Personal injury lawsuits typically are not resolved quickly, and it is not uncommon for a case to take several years to settle. This is partly due to the fact that some injuries require extensive medical treatment before the client is considered to be at “maximum medical improvement,” a time when past, present and future damages can be calculated.
Litigation and chances of winning a lawsuit
Litigation is very expensive, stressful and the outcome can be extremely unpredictable. Because negligence must not be proven in workers’ compensation cases, it is generally far easier to win a workers’ compensation case than it is to win in a personal injury case. While it is usually advantageous to settle either a workers’ compensation matter or a personal injury case out of court, there are times when this is not possible, and the dispute is either set for hearing or trial.
Bottom line: Workers’ compensation vs. personal injury
Most workers who are injured on the job are covered under their employer’s workers’ compensation insurance. They do not need to prove negligence and will most likely file a claim with the workers’ compensation board in their state, or the federal government if they’re a federal employee. In exchange for monetary benefits, workers’ compensation law requires injured employees to give up the right to bring a fault-based personal injury lawsuit against their employer, although under very specific circumstances they might still be able to file such a claim.
While the payoff can be much higher in a personal injury case than in workers’ compensation, personal injury cases typically take much longer to finalize, and because negligence must be proven, they are usually much harder to win.
This article originally appeared on Avvo and was written by Massachusetts lawyer Morgan Gray.
Your article made me remind of my experience while claiming for worker's compensation. I slipped from the office stairs and injured my back. Wasn't able to stand straight and walk. Even this incident caused loss of earnings. I took help of a local injury law firm to make a claim. I still remember that incident.
You raised a decent point about cover. Considering work environment wounds can likewise be viewed as individual wounds, you must be watchful in which class you place them in. In the event that I happened to hurt myself at work, I would need to get the assistance of a legal counselor that has some expertise in laborer's comp cases. They would have the information to tell me what sort of harm I managed and how I would get some kind of settlement from it.
It is interesting that fault isn't necessarily important with this type of thing. This makes sense because the workplace is responsible for what happens to a worker on the job, including protecting the worker's for their own potential mistakes. Also, it is interesting to me that you mentioned how in some situations a lawsuit is more appropriate. Could you elaborate more on which situations would require this?
Great question! The different types of situations where a lawsuit may be more appropriate can be quite numerous. If you have a question about a specific scenario, we'd encourage you to ask a (free & anonymous) question on the Avvo Q&A forum, here: https://www.avvo.com/ask-a-lawyer
Most people will get an answer within about an hour, and often a few within a day or two. Does that help?
This is all important information to have on hand, considering this could happen at the most unexpected time. Thanks for taking the time to explore the difference between worker's compensation and personal injury lawsuits, it was really helpful!
I've never been hurt at work, nor have I known anyone that has, but I'm sure it happens more than most think. I like that this brought up the overlapping areas of personal injury, and workers compensation. I guess it just depends where the injury happens.
My friend was injured at work but the company is not wanting to give her workers comp. Because of this, she is thinking of hiring a lawyer to fight for her benefits. It's good to know that often times if your lawyer loses the case that there is no fee.
I didn't know that proof of fault doesn't need to be established for workers' compensation benefits to be paid. However, like you said, personal injury cases do need to prove that another party was at fault. Because of that, it seems like workers' compensation is the easier way to get compensation if you were injured on the job. Thanks for the information.
Last week, my husband got injured at work and it has really been affecting him. Another employee hit him with a forklift in his company's warehouse, but says that it was an accident. We are trying to make the decision of whether or not he should file for a workers compensation claim. If the incident was really an accident and not intentional, can a claim still be made?
Sorry to hear about your situation. It sounds like you have several legal questions that would be best answered by a lawyer in our free Q&A forum. Lawyers do not provide advice through our blog, but they do in the forum -- usually within 12 hours. All questions are open to answers for seven days. You can post your questions here when you're ready: http://www.avvo.com/ask-a-lawyer. You can also browse previously asked questions and lawyer answers, or read legal guides that may answer your questions, here: http://www.avvo.com/free-legal-advice. I hope this is helpful!
This read has a lot of great information. Sometimes, people don't know the differences between the two. And sometimes, they don't know where to start. This is a great background for what someone will go through during the process. Thanks for sharing.
I like the point you made about negligence being harder to prove. It seems like getting workers compensation would be the best route. I imagine a lawyer could help out either way. My brother hired one when he injured his back at a manufacturing plant.
It's good to know that there are workers compensation lawyers that can help you determine what type of case to pursue. What about the instance that you receive workers compensation but another contractor or someone not associated with the company causes your injury? Is there any way to file both or do you have to choose?
Hi Jennifer, it sounds like you have several legal questions that would be best answered by a lawyer in our free Q&A forum. Lawyers do not provide advice through our blog, but they do in the forum, and usually within 12 hours. All questions are open to answers for seven days. You can post your questions here when you're ready: http://www.avvo.com/ask-a-lawyer. You can also browse previously asked questions and lawyer answers, or read legal guides that may answer your questions, here: http://www.avvo.com/free-legal-advice. I hope this is helpful!
You brought up a good point about overlap. Considering workplace injuries can also be considered personal injuries, you have to be careful in which category you put them in. If I happened to hurt myself at work, I would want to get the help of a lawyer that specializes in worker's comp cases. They would have the knowledge to let me know what kind of injury I sustained and how I would go about getting some sort of settlement from it.
My wife and I are business owners and we have never really had any issues with our employees being injured on the job apart from the occasional paper cut. I have been reading a lot of stories lately about workers compensation cases so we are considering getting insurance to help us in case of injury. I would never want to get pulled into a lawsuit if the incident could have been prevented in the first place. Thank you for the information.