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Is an insurance company entitled to assert a lien against a recovery that you obtain? – New York Injury Law Show: Episode 6

Posted by Scott M. Peterson | Nov 12, 2018

Today we're talking about a common issue that comes up in many lawsuits, which is the issue of liens. 

As an example, if you get hurt at work, one of the first things you may do is file a workers compensation claim. Workers compensation insurance will provide coverage for your medical bills as well as some repayment for lost wages.

In many cases the next step is to file a lawsuit against a third-party wrongdoer.  When that happens, the worker's compensation insurance company will be entitled to assert a lien against any recovery that you obtain.

Let's look at an example. Say you're driving your company car for work, are struck by another car and break your leg. You file a workers compensation claim and as a result of that compensation claim, you obtain medical benefits. You then hire a lawyer to file a lawsuit against the driver who hit you. In the context of the lawsuit, you settle the claim for one hundred thousand dollars. The worker's compensation insurance carrier who has paid, let's say, thirty thousand dollars in medical expenses has the right to say to you - "we want you to repay our medical expenses out of the proceeds of the settlement against that other driver."

Now, ordinarily, there is some room for negotiation of any kind of a lien, and your attorney, who has some experience in negotiating personal injury liens, may be able to negotiate with the insurance carrier.  

It is important to keep in mind, however, that the insurance carrier is legally entitled to assert that lien, under most circumstances, and it's important the lien is considered in the context of any settlement negotiations or case evaluation.

Liens are also applicable in social services contexts. In the context of Medicare or Medicaid, an injured person's bills are often paid by Medicare. Medicare is then entitled to assert a lien against the proceeds of any recovery. So, if a 75-year-old slips and falls and breaks their hip, and pursues a personal injury lawsuit against the facility, Medicare may have a right to be reimbursed for some portion of what it has paid out of the proceeds of any settlement.

This is all part of the behind the scenes process during a lawsuit, and an experienced personal injury lawyer will be able to help you navigate that process. If you have questions - contact us today. We're happy to help. 

About the Author

Scott M. Peterson

Scott M. Peterson is the founding partner of D'Orazio Peterson, having left a partnership at a large regional law firm to limit his practice and focus on helping people protect their families.

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