What is a workers' compensation lien?

A workers’ compensation lien is a legal claim a workers’ compensation insurer has against a third party for damages. It is a tool that allows insurers to seek reimbursement from the responsible third party for the money they paid out in workers’ compensation benefits. In California, the law allows workers’ compensation insurers to file a lien against a third party for the cost of medical care and other benefits the insurer provided to an injured worker. The third party in this case can be a business, a person, or a government entity. For example, if a worker was injured in a motor vehicle accident, the workers’ compensation insurer may file a lien against the driver’s insurance company for money they paid out in benefits. A workers’ compensation lien must be filed within one year of the workers’ compensation benefits being paid out. If the lien is not filed within one year, the insurer loses their right to seek reimbursement. The lien is also limited to the amount the insurer paid out, meaning they can only receive the same amount they paid in benefits. It is important to note that a workers’ compensation lien should not be confused with a lien that is filed against a worker’s property. A workers’ compensation lien is only filed against the responsible third party and does not affect the injured worker or their property.

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What is a workers' compensation lien?

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