Regardless of fault, i.e., whether or not the employee caused the crash, injured employees should be covered by workers’ compensation, PIP, and health insurance (including Medicare). Workers’ compensation and PIP are primary over Medicare, meaning Medicare will expect workers’ compensation and PIP to pay before it does, and if it does pay, to be repaid from the proceeds of a workers’ compensation or personal injury settlement.
If the injured employee is not at-fault, he or she can pursue a civil remedy for damages against the at-fault driver and the vehicle owner if different than the driver. The funds for the recovery would come from the liable party’s bodily injury (BI) insurance coverage and/or personal assets.
In some instances, the liable party may not maintain bodily injury insurance or the BI coverage limits may not be enough to pay the full measure of damages. Florida offers an optional type of insurance coverage to protect the injured party under those situations. The type of coverage is known as uninsured and underinsured vehicle coverage (UM/UIM). The purpose of the insurance is “for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom.” Section 627.727(1), Florida Statutes (2025). Basically, UM and UIM substitute for the inadequacies in coverage of the at-fault party.
Florida Statute 440.39 grants workers’ compensation insurance carriers an equitable lien against any judgment or settlement ultimately recovered by the employee from a third-party tortfeasor. This allows workers’ compensation insurance carriers to recover from the proceeds of third-party payments portions of the expenditures they have made on behalf of injured employees.
Interestingly, the 440.39 workers’ compensation lien does not apply to UM or UIM coverage. See Volk v. Gallopo, 585 So.2d 1163 (Fla. 4th DCA 1991)(The basis for the holding was that a plain reading of section 440.39(3)(a), Florida Statutes precludes a workers’ compensation carrier from benefitting from UM coverage); see also section 627.727(1), Fla. Stat. (2025)(stating that UM “coverage shall not inure directly or indirectly to the benefit of any workers’ compensation … carrier….”)
(a) If an injured person or, in the case of death, the personal representative agrees to settle a claim with a liability insurer and its insured, and such settlement would not fully satisfy the claim for personal injuries or wrongful death so as to create an underinsured motorist claim, then written notice of the proposed settlement must be submitted by certified or registered mail to all underinsured motorist insurers that provide coverage. The underinsured motorist insurer then has a period of 30 days after receipt thereof to consider authorization of the settlement or retention of subrogation rights. If an underinsured motorist insurer authorizes settlement or fails to respond as required by paragraph (b) to the settlement request within the 30-day period, the injured party may proceed to execute a full release in favor of the underinsured motorist’s liability insurer and its insured and finalize the proposed settlement without prejudice to any underinsured motorist claim.(b) If an underinsured motorist insurer chooses to preserve its subrogation rights by refusing permission to settle, the underinsured motorist insurer must, within 30 days after receipt of the notice of the proposed settlement, pay to the injured party the amount of the written offer from the underinsured motorist’s liability insurer. Thereafter, upon final resolution of the underinsured motorist claim, the underinsured motorist insurer is entitled to seek subrogation against the underinsured motorist and the liability insurer for the amounts paid to the injured party.
The only reasons why the UIM insurer would pay the BI settlement offer is if it also expected to pay some UIM to its insured and had a decent chance of recovering the UIM payment from the at-fault party. By paying the BI offer, the UIM carrier preserves its right to seek subrogation by preventing the at-fault party from securing a release of all claims from the injured party.
In Metrix South v Rose, 758 So.2d 1259 (Fla. 4th DCA 2000), the UIM carrier refused permission to settle the BI case. Instead, it paid the $100,000 policy limits tendered by the liability carrier. The workers’ compensation carrier argued that its 440.39 lien applied to the proceeds. The trial court disagreed, characterizing the $100,000 payment as UIM benefits. The trial court was reversed on appeal, with the 4th DCA deciding as follows: “… we conclude that the trial court erred in characterizing the $100,000 payment to appellees as UM benefits and not a judgment or settlement recovered by the employee.” Hence, the $100,000 payment from the UIM carrier was considered the equivalent of bodily injury coverage from the third-party tortfeasor and thus subject to the WC lien.
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