Workers' Compensation or a Third-Party Claim: Comparing the Two Tracks After an Industrial Accident

Two Tracks, One Injury: What Workers' Compensation and Third-Party Claims Are

Workers' compensation is the system, set up by each state's own law, that provides benefits to employees hurt on the job. It runs through the employer, usually through the employer's insurer. Because every state writes its own workers' compensation law, the rules on who is covered, what benefits exist and how a claim is filed differ from one state to the next. No single state's system is the rule everywhere.

A third-party claim is a civil claim, meaning an ordinary injury lawsuit or a demand that could become one, brought against someone other than the employer. In an industrial accident, that other party might be:

• the company that designed or built a machine, a press or a forklift involved in the injury;
• an outside contractor working at the same site;
• a maintenance or repair company that serviced equipment;
• the company that operates the site, when that company is not the worker's employer.

One accident can give rise to both tracks at once. A worker hurt when a contractor's crew restarted a machine, for example, may have a workers' compensation claim through the employer and, depending on the facts, questions about the contractor's role as well. Which track applies, or whether both do, shapes who answers for the injury, what has to be shown, and what kinds of losses the law may address.

Because each state sets its own rules for both tracks, the same facts can lead in different directions depending on where the accident happened. A conversation with an attorney can help a worker or family see which tracks may be open under their state's law. The broader picture of how an industrial accident attorney approaches these injuries is covered elsewhere on this site.

If You Are Claiming Workers' Compensation: What the Claim Usually Asks

The central feature of workers' compensation is that it is generally a no-fault system. A worker usually does not have to prove that the employer was careless to receive benefits. The focus instead is on whether the person was an employee and whether the injury happened in the course of the job, under the terms of the state's own law.

The claim is made against the employer, or in practice against the employer's workers' compensation insurer. Many states handle these claims through an administrative agency rather than a jury trial, though how that works is a matter of each state's law.

What workers' compensation usually covers is described in broad categories, typically medical care for the injury and a portion of the wages lost while the worker cannot work, with death benefits for families in some situations. How each category is defined, calculated and how long it lasts all differ by state. This page does not describe any one state's workers' compensation rules, because they vary too much for one description to be accurate everywhere.

For an injured worker, the practical stake is often time and income. Medical treatment and a wage replacement can matter in the first weeks after an accident, and the no-fault structure means the question is usually about coverage and the injury rather than blame. If you are at this stage, the questions worth weighing tend to be whether you were classified as an employee and how the injury connects to the job, since those are what the claim usually turns on.

Federal workplace safety law sits alongside this system without changing it. Under 29 U.S.C. § 654, each employer "shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees" and "shall comply with occupational safety and health standards." That duty is enforced through the safety system, separate from a workers' compensation claim. Questions about who qualifies under a state's system, and how employment status matters, are covered in this site's guide on who can bring a claim.

If Another Company May Be Responsible: What a Third-Party Claim Has to Show

If you are considering a claim against a company other than your employer, the main difference is that fault has to be proven. In general terms, a person bringing a third-party claim has to show four things: that the other party owed a duty of care, that it breached that duty, that the breach caused the injury, and that the injury led to damages, meaning losses the law recognizes. Where the claim is about a product, such as a machine, the question often turns on whether the product had a defect and whether that defect caused the harm. Whether any of these elements is met depends entirely on the facts. An injury, however serious, does not by itself prove that anyone was at fault, and an accident does not by itself prove a machine was defective.

Federal safety rules can bear on what duties companies at a shared worksite carry. One example is the lockout/tagout standard, which governs how dangerous machine energy is controlled during servicing. Under 29 C.F.R. § 1910.147(f)(2), "whenever outside servicing personnel are to be engaged in activities covered by the scope and application of this standard, the on-site employer and the outside employer shall inform each other of their respective lockout or tagout procedures," and the on-site employer "shall ensure that his/her employees understand and comply with the restrictions and prohibitions of the outside employer's energy control program."

A rule like this shows that federal safety law can place duties on more than one company at the same site. It does not, by itself, decide who is legally responsible for an injury in a civil claim. Congress said so directly. Under 29 U.S.C. § 653(b)(4):

"Nothing in this chapter shall be construed to supersede or in any manner affect any workmen's compensation law or to enlarge or diminish or affect in any other manner the common law or statutory rights, duties, or liabilities of employers and employees under any law with respect to injuries, diseases, or death of employees arising out of, or in the course of, employment."

In plain terms, the federal safety law leaves each state's workers' compensation law and injury law where it was. A safety standard may be part of the story a third-party claim tells, but state law decides the claim.

The stake here is a trade-off. A third-party claim may reach categories of damages that a state's workers' compensation system does not address, as that state's law allows, but it asks for proof of fault and causation that workers' compensation generally does not. For someone weighing this track, useful questions include which companies were involved with the equipment or the work, and what each one's role was at the moment of the injury. The OSHA worker rights page describes the separate safety rights workers have, including the right to "work on machines that are safe" and to "report an injury or illness, and get copies of your medical records."

Why Your Share of Fault May Matter in a Third-Party Claim

When a worker brings a civil claim against another company, that company may argue that the worker's own actions played a part in the injury. How that argument is handled depends on the state. Two broad families of rules exist. Comparative fault reduces what a person may recover by their own share of fault. Contributory negligence is a different and older rule, under which a person found to have contributed to their own injury can be barred from recovering at all.

Three states' own texts show how far apart these rules can be. Each is that state's rule only.

Washington uses what is often called pure comparative fault. Under section 4.22.005 of the Revised Code of Washington, in an action based on fault, "any contributory fault chargeable to the claimant diminishes proportionately the amount awarded as compensatory damages for an injury attributable to the claimant's contributory fault, but does not bar recovery."

Texas uses a modified comparative fault rule. Under section 33.001 of the Texas Civil Practice and Remedies Code, in an action to which that chapter applies, "a claimant may not recover damages if his percentage of responsibility is greater than 50 percent." Under section 33.012 of the same code, if the claimant is not barred, the court reduces the damages "by a percentage equal to the claimant's percentage of responsibility." This site's page on Texas industrial accident claims covers that state in more depth.

Virginia follows contributory negligence. In a 2021 decision, AlBritton v. Commonwealth of Virginia, the Supreme Court of Virginia described contributory negligence, "when proven," as "an absolute bar," and said a court may decide that issue on summary judgment "only when reasonable minds could not differ."

These are three examples, not a survey of every state. The rule of the state whose law applies governs. For a worker, the stake is real: the same conduct at the moment of an accident, such as stepping around a guard or working without a lockout device in place, could reduce a recovery in one state and end the claim in another, depending on the facts and how a factfinder sees them. If you are concerned that your own actions may come up, two questions to raise with an attorney are which state's law applies and how that state treats a worker's share of fault.

When Both Tracks Are Open at the Same Time

Some industrial accidents involve more than one company, and that is when both tracks may run side by side. A worker may receive workers' compensation through the employer while a separate civil claim is examined against an equipment manufacturer, an outside contractor, a maintenance company, or a site operator that is not the employer. Situations like these are common in shared spaces such as distribution centers; the site's page on the warehouse accident lawyer topic walks through them.

If you are in this position, it helps to know that the two claims stay separate. Each involves different parties, a different legal standard and, often, different kinds of losses. Your workers' compensation claim generally turns on your employment and the injury. A third-party claim turns on duty, breach, causation and damages, and the other company may raise a fault defense under the state's rules. Whether the workers' compensation insurer has an interest in any third-party recovery depends on your state's law, which is one reason the two tracks are often reviewed together.

If you are weighing both, the records that usually matter overlap. Medical records and bills document the injury for both tracks. The employer's incident report records what was noted at the time. Photos or video of the scene and the equipment, and the machine or part itself if it was kept, can bear on whether there was a defect. Maintenance and service logs and the names of contractors and coworkers present can show which companies were involved. OSHA inspection records may show what safety duties were at issue. The OSHA page notes that workers have the right to "review records of work-related injuries and illnesses" and to "see results of tests taken to find workplace hazards."

Limitation periods, meaning the deadlines for bringing a claim, also differ by state and may differ between the two tracks. Whether both tracks are available at all depends on the facts and the state's law. If you want to talk through which companies were on site and what records exist, you can request a case evaluation with our attorney.

Comparing Your Options: A Side-by-Side Look at the Two Tracks

The table below summarizes the two tracks as described on this page. It is a comparison, not a recommendation of one over the other, and state law governs every row.

The two tracks answer different questions. One is about coverage for a job injury; the other is about whether another company's conduct caused it. A family trying to understand both often finds it helps to separate them this way first, then ask which companies besides the employer were involved, and which state's rules govern. Those are the points a conversation with an attorney can help sort out. The site's industrial accident resources page gathers the federal standards mentioned here.