Insurers Should Take Notice of Ohio Workers’ Comp Subrogation Ruling

The Ohio Supreme Court has held two insurers jointly and severally liable to the Ohio Bureau of Workers’ Compensation (BWC) for past, present and estimated future payments the BWC made under a workers’ compensation claim.

In Bur. of Workers’ Comp. v. Verlinger, the Court held 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 self-insured for workers’ comp) 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 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’ comp claim. Neither the insured nor the insurance companies put the BWC on notice of its subrogation interest in the insurance payments. The Court held that the BWC’s right of subrogation vests at the time of the injury. Prior to this, it was common practice for injured workers to assert the subrogation interest did not arise until after the claim was allowed and payments made.

It is now essential that third parties making payments for damages arising out of an Ohio work-related injury ensure proper subrogation notice is made. Failure to do so makes the third-party jointly and severally liable with the injured worker for payments made under the comp claim.