Are You Liable if Your Employee is Injured at Work?

Do you know how many work-related accidents happen every year? According to the International Labor Organization, there are around 340 million occupational incidents annually across the world.

Add to that the 130 million people who succumb to work-related illnesses, and it’s clear that work accidents are a significant issue.

It’s not surprising, given that we spend roughly a third of our entire lives at work. Sooner or later, an accident is bound to happen.

The main culprits? Slips, trips, falls, overexertion and contact with objects and equipment account for more than 84% of non-fatal injuries.

A surprising percentage (40%) of work-related accidents also occur on the road. Transportation incidents can include car accidents while employees are driving to meet clients or large-scale truck accidents during delivery runs.

When you think of workplace injuries, your mind might conjure images of a construction worker falling off scaffolding or a warehouse packer slipping on a wet floor and injuring their back. But the truth is an accident is as likely to happen in an office or retail environment, and as an employer, you could be liable.

Do you have workers’ compensation insurance?

Whether or not you are legally required to take out workers’ compensation — or workers’ comp — insurance depends primarily on where you are in the US. In all states but Texas, workers’ comp insurance is mandatory for most businesses. Only smaller organizations with fewer than a handful of employees or that fall under a specific revenue cap have the option not to take out this type of insurance.

However, even if you’re based in Texas or don’t meet the criteria required, it’s still worth having workers’ comp.

From an employee’s perspective, workers’ compensation is valuable because if they’re injured at work, they can continue to receive their wages and be compensated for their medical bills. It removes the financial burden associated with being off work for some time and allows them to focus on their recovery.

From an employer perspective, it’s just as beneficial, as an employee cannot hold you liable for their accident and pursue a personal injury claim against you — which could result in a sizable settlement or a lengthy trial — if they receive a workers’ compensation payout.

The difference between workers’ compensation and personal injury claims

Like a personal injury claim, workers’ compensation covers an employee’s lost wages and medical expenses, but the similarities end there.

For a personal injury claim to be successful, an employee — or, more likely, the personal injury lawyer they hire to work on their case — must meet a specific burden of proof.

They must show:

• The party owed them a duty of care
• The party breached that duty of care through recklessness or negligence
• The breach caused the injury.

To do so, they will often seek medical records, crash reports (in transportation incidents), witness testimony, site examination reports, and more.

This is a high burden, but it can be lucrative for an employee. Often, the largest settlements comprise non-economic damages, which compensate victims of accidents for any pain and suffering, mental anguish and loss of enjoyment as a result of their injury.

When non-economic damages are applied to a settlement, it can multiply the amount an employee is entitled to by as much as 400%.

In contrast, recklessness and negligence are irrelevant in a workers’ compensation claim. An employee only needs to show they were injured at work, and they cannot receive additional non-economic damages.

It’s a vital distinction, as an employee may be able to file a personal injury claim if you do not have workers’ compensation. For example, if you’re in Texas and opt not to get insurance, and your employee catches their foot on a trip hazard you were aware of but didn’t promptly fix, they could claim it was a negligent act that breached their duty of care.

When employees can receive workers’ compensation and file a personal injury claim

While a workers’ compensation claim bars an employee from filing a personal injury claim against you, it doesn’t mean they can’t receive compensation from a third party.

For example, if you work in construction and an employee or contractor is injured by malfunctioning equipment, they can receive workers’ compensation from your insurance company to cover their medical expenses and lost wages. They may then choose to file a separate personal injury claim against the manufacturer of the defective equipment — assuming they can meet the burden of proof.

What to do if your employee is injured at work

Whether your employee trips on a poorly laid carpet, slips on a wet floor, or is struck by one of the Occupational Safety and Health Administration’s (OSHA) “Fatal Four,” what you do next depends largely on whether or not you have workers’ comp insurance.

If you do, your employee is obligated to tell you about the accident as soon as possible. They have a short period to do this, ranging from a few days to several months, depending on your jurisdiction.

Then, you must tell your insurer about the accident. The Workers’ Compensation Commission will review the case and determine if they are entitled to a payout.

If you do not have workers’ compensation and an employee can prove you were negligent or reckless, they may choose to file a work injury claim. It could result in a hefty settlement that hugely impacts your business. With many personal injury lawyers working on a contingency fee basis, there’s little reason for an employee not to at least explore the possibility of a lawsuit, so seek legal advice to know where you stand.