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Work Comp Subrogation – Third Concern When Ignored By Adjusting Staff

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Work Comp Subrogation Additional Concern

Work Comp subrogation has a kind of quirky standard definition.

Vector Graph of Man Work With Helmet work comp subrogation without Helmet
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To me, it is the possibility of another party having to share the monetary responsibility of an insured incident or accident.

I give the example in my manual of a company salesperson on sales calls being hit by another car in the back bumper and sustaining Workers Compensation injuries.

The driver of the other car should pay for the damages sustained and reimburse the Workers Comp carrier.

We usually see two errors being made during our file reviews:

  • We often see the subrogation funds being added back into the file after the file has been closed. However, the amounts reported to NCCI may not change. The funds could greatly affect a company’s Workers Compensation E-Mod.
  • The Workers Comp adjuster may not have enough time to pursue subrogation or may take a small % of the liability settlement.

Both instances are E-Mod killers. As I pointed out in my manual, there are 13 basic functions of a claims adjuster.  This area is one of the lower priority tasks.

In the 1980s, adjusters became much more specialized.  I was lucky enough to have experience as an all lines claims adjuster.

Workers’ Comp adjusting evolved to become a very specialized type of adjusting in the 1990s.  Each state has its own set of laws and regulations on handling WC claims.   Some similarities exist between the states.

Insurance carriers and TPAs rarely have an auto or premises liability adjuster cover workers’ compensation claims.  Over time, their employer rarely trained a  workers’ comp adjuster in liability adjusting.

The ability was seen as unneeded and a time-waster.   Bottom line – workers’ comp adjusters need more training in subrogation liability.   Without it, large amounts of money will be left on the table that could be refunded back to an employer’s file and eventually their E-Mod or LDF.

The employer will likely have to monitor the subrogation follow up in most situations.   There are many articles on how to track work comp subrogation in this blog.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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