In exchange for workers’ compensation protection, an injured worker loses the right to sue the employer under the common law for negligence. An injured worker retains the right, however, to sue a third party whose negligence caused or contributed to the worker’s injury, even if the worker receives workers’ compensation. A common example of this involves a sales employee whose job duties include driving to customers throughout a certain territory. If that employee, while making a sales call, is injured by a negligent motorist who runs a red light, the employee is covered by workers’ compensation but can additionally sue the motorist under a common law tort theory. If the worker recovers money from the negligent third party motorist, the worker must repay the employer or insurer who paid workers’ compensation benefits and keep only what is left. In some jurisdictions, the employer or insurer paying workers’ compensation benefits may sue a negligent third party on behalf of an injured worker with the hopes of recovering part or all of those benefits from the third party. This is known as subrogation.
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