What does 'subrogation' refer to in workers' compensation claims?

Subrogation in the context of workers' compensation claims refers to the right of an insurer to recover costs from a third party that may have contributed to or caused an employee's injury. When an employee is injured on the job and receives workers' compensation benefits, the insurer may determine that a third party (such as a manufacturer of defective equipment or a negligent driver) is partially responsible for the injury. In such cases, the insurer has the right to pursue reimbursement from that third party for the costs incurred in providing benefits to the injured worker.

This process helps ensure that the costs associated with workplace injuries are ultimately borne by those who are liable, rather than being solely absorbed by the insurer or passed on to employers. Subrogation is an essential tool in managing and mitigating the financial impacts of workers' compensation claims, promoting accountability among third parties who may be at fault in injury cases.