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High court says Mississippi worker has paid enough to insurer

Sometimes when Mississippi workers are injured, it may be necessary for them to sue a third party in addition to receiving benefits under our state's workers' compensation law. Consider the case of a Mississippi man who was injured on the job when a train in Alabama hit his truck.

The accident arose out of the man's employment, so he filed a Mississippi workers' compensation claim and received payments from his employer's insurer. The employer was based in Mississippi, hence the location of the worker's filing.

In addition to the workers' compensation claim, the man sued the Alabama train operator, and a settlement was agreed upon. The worker gave part of the settlement to his employer's insurer to pay back benefits the worker received, and here is when the case became especially interesting.

The insurance carrier decided to sue the worker and seek the full amount of workers' compensation paid to the injured employee. This happened after the settlement of the Alabama lawsuit, which the insurer had been notified of previously. However, the insurance carrier did not take any action to participate in the lawsuit, and the Mississippi Supreme Court ruled that the insurer was late in trying to collect from the worker.

According to Mississippi law, an insurance carrier does have the right to take part or intervene in a third-party lawsuit filed by an injured plaintiff, and an insurance carrier may have a right to be reimbursed for payments made to an injured worker. But the insurance carrier may not wait until a third-party lawsuit is settled and then decide to seek reimbursement.

According to the high court, the insurer missed the chance either to intervene in the third-party lawsuit or reach a contractual agreement with the worker.

The case illustrates the degree to which some insurers will go to reduce or deny payouts to an injured employee. Workers who find themselves faced with this situation would do well to consult with a workers' compensation attorney.

Source: Risk & Insurance, "Insurer's failure in third-party action cuts reimbursement," Aug. 12, 2013

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