Ohio Supreme Court Subrogation Case Should Give Insurers Pause on Work-Related Injury Claims

Last week, in Bur. of Workers’ Comp. v. Verlinger, the Ohio Supreme Court held two insurers jointly and severally liable to the Ohio BWC for all past, present and estimated future payments the BWC made under a workers’ compensation claim. The Court held that the subrogation interest arose because the insurers failed to notify the BWC of its subrogation interest in settlement payments made for damages arising out of a work-related motor vehicle accident.

Ohio Revised Code §4123.931 gives the Ohio BWC (or an employer that is self-insured for workers’ compensation purposes) a subrogation interest in any payments made by a third-party to an injured worker for damages arising out of a work-related injury. Revised Code §4123.931 also requires that the BWC/self-insured employer be given notice of the third-party payment and a right to assert its subrogation interest.

In Verlinger, the insurers for the injured worker and the driver who caused the accident entered into settlements with the injured worker before she filed her workers’ compensation claim. Neither the insured nor the insurance companies put the BWC on notice of its subrogation interest in the insurance payments. The Ohio Supreme Court held that the BWC’s right of subrogation vests at the time of the injury. Prior to this case, it was common practice for injured workers to assert that the subrogation interest did not arise until after the workers’ compensation claim was allowed and payments were made. Both the Ohio BWC and, more importantly, the Ohio Supreme Court disagreed.

The Verlinger case makes it essential that third parties making payments for damages arising out of an Ohio work-related injury ensure that proper subrogation notice is made. Failure to do so makes the third party jointly and severally liable with the injured worker for all payments made under the workers’ compensation claim.

Eric Rich an associate with Scheuer Mackin & Breslin, LLC, a statewide Ohio law firm that advises and represents employers in their workers’ compensation and employment-related interests. Rich frequently speaks about subrogation, Medicare set-aside and other issues, and blogs about issues of interest to Ohio employers at ohioemployersinjurylaw.blog.