What does “subrogation” mean in the workers' compensation context?

Subrogation in the context of workers' compensation refers to the process by which an insurance company seeks reimbursement for the money it has paid out in benefits from a third party that may have been responsible for an employee's injury. When a worker is injured on the job due to the negligence of another party—such as another driver in a vehicle accident—the workers' compensation insurer may cover the employee's medical expenses and lost wages. However, the insurer has the right to recover those costs from the liable third party through subrogation.

This process serves to prevent the responsible party from escaping liability for their actions while ensuring that the employees still receive the benefits they need without interruption. It underscores the principle that while the injured employee may receive benefits through their employer's insurance, the financial burden can be shifted back to the party at fault, thus holding them accountable for their negligence. This mechanism is important in maintaining the balance within the workers' compensation system and ensuring that insurers can manage their financial responsibilities effectively.