Workers’ Compensation and Your Right to Sue Third Parties

Arizona Injury Law Group

Workers Injury

Workers’ compensation developed in Arizona and elsewhere in the U.S. as a method of allowing workers injured on the job to receive the medical care they needed without the necessity of filing a lawsuit against their employers to recover the cost. Although they gave up the right to sue employers in most instances, injured workers did not give up the right to sue other parties who might have contributed to their injuries through acts of negligence.


By law, the majority of employers must provide workers’ compensation insurance coverage at no cost to their employees. The insurance pays for medical treatment and lost wages of employees injured in work-related accidents or due to illnesses, such as breathing disorders, related to conditions under which they work. Employees covered by a workers’ compensation policy are also entitled to compensation for a permanent impairment resulting in a disability.

Employers who comply with state law by providing workers’ compensation insurance coverage normally cannot be sued by their employees for job-related injuries or diseases. Someone injured on the job due to the conduct of another employee generally cannot file a lawsuit against the employee as long as the injured party is covered under a workers’ compensation policy.


If someone other than your employer or a co-worker caused or contributed to your injury, you have the right to sue in what is referred to as a third-party claim. Third-party claims occur more frequently than you might at first imagine. Examples of third-party claims include:

  • An employee of a package delivery service bitten by a dog while making a delivery.
  • A factory worker injured while working on a piece of machinery that was defectively designed by the manufacturer.
  • A sales person on the way to meet with a customer who is injured in a car accident caused by another driver.

In all of the examples, the injured worker would be entitled to file a claim for benefits through workers’ compensation because the injuries occurred in a work-related incident. The worker would also have the right to sue the owner of the dog, the manufacturer of the machinery and the driver of the other vehicle. There are, however, some rules the worker must follow to satisfy the requirement of the workers’ compensation law pertaining to third-party claims.


If you have the right to sue a third party, you must notify the worker’s compensation insurance company and file the lawsuit within one year from the date of your injury. State law states that failure to sue or settle the claim within one year allows the workers’ compensation insurance company paying your benefits to pursue the claim under a right of subrogation. You might be able to retain the right to sue beyond one year, but you must obtain permission from the insurance company that can refuse to grant it to you.


If you received workers’ compensation benefits, your claim against a third party related to those injuries cannot be settled without written approval from the workers’ compensation insurance company. This is because the company might have a lien against some of what you receive.

Keep in mind that the law does not allow you to collect twice by receiving workers’ compensation benefits and suing a third party for negligent conduct. The insurance company paying your benefits could have the right to recover a portion of the money it paid to you from the money you receive in settlement of your claim against the third party. The rules under which the workers’ compensation insurance company is entitled to reimbursement are complex, so your attorney is the best source of guidance and legal advice.

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