This month, a new law went into effect which will help protect Ohio employers who frequently send their employees on the road. Prior to July 1, 2017, if an employee was injured in a motor vehicle accident during the course and scope of his or her employment, the employee would have a valid workers’ compensation claim. The employer’s BWC policy would be charged the costs of the claim. The BWC, as the payor of workers’ compensation benefits, would then have the right to assert a subrogation claim against the third-party or third-party’s insurance company to recover the claim costs. Unfortunately, the subrogation process was slow and the employer had no control over when and how much was recovered from the third-party. This would frustrate employers as they were assessed higher BWC premiums for claims caused by third-parties.
Last fall, a bill was signed into law that took effect on July 1, 2017. Now, if an employee is involved in a motor vehicle accident with a third party, the employer’s BWC policy won’t be charged if certain circumstances apply. Specifically, in employee motor vehicle accidents, if the third party is given a citation for the accident and either the third-party’s insurance policy covers the claim or an underinsured/uninsured motorist insurance policy covers the claim, then the costs of the claim will be charged to the Ohio BWC’s surplus fund and not the employer’s BWC policy. This means that employers will no longer have to wait for the BWC to assert a subrogation claim against the third-party; instead, employer will not be liable for motor vehicle accidents caused by third-parties.
While the circumstances in which this provision applies may be somewhat narrow, employers should be pleased that workers’ compensation claims arising from motor vehicle accidents will not automatically hit their BWC policies. This should result in lower claims costs, and therefore, lower BWC premiums for Ohio employers in the future.