What’s the Difference: Workers’ Comp vs Third-Party Claim in California?

If you were injured on the job in Los Angeles or anywhere in California, you may be unsure about your legal options. You might have heard of workers’ compensation, but what if someone outside of your employer was responsible for the injury? That’s where third-party claims come into play. Although both workers’ compensation and third-party claims can arise from the same accident, they are very different in terms of how they work, what proof is needed, and what compensation they provide.

This article breaks down the critical differences between workers’ compensation and third-party claims so you can understand what steps may be available to you after a workplace injury in California.

What Is Workers’ Compensation?

Workers’ compensation in California is a no-fault system created to provide benefits to employees who suffer job-related injuries or illnesses. It’s governed by laws such as California Labor Code Section 3700, which requires nearly all employers to carry workers’ compensation insurance—even if they only have one employee.

As an injured worker, you don’t have to prove anyone was at fault to receive workers’ comp benefits. You’re eligible as long as your injury occurred while you were performing work duties. Benefits can include:

• Coverage for medical treatment related to your injury
• Partial replacement of lost wages through temporary disability benefits
• Permanent disability payments if you suffer lasting impairments
• Job retraining support if you can’t return to your previous job
• Death benefits for surviving dependents

However, there’s an important tradeoff: by accepting workers’ compensation, you typically give up the right to sue your employer or co-workers for negligence. That means you can’t recover damages for pain, suffering, or the full amount of lost income.

What Is a Third-Party Claim?

A third-party claim is a legal action you can take against someone other than your employer who contributed to your injury. These claims often arise when another individual, company, or property owner caused or worsened a workplace injury.

For example, if you’re a delivery driver and another driver runs a red light and hits your vehicle while you’re working, you can file a third-party claim against that driver. Similarly, if you were injured by a defective piece of machinery, you might have a claim against the manufacturer. If your injury occurred on a client’s unsafe premises, you could potentially sue the property owner.

Unlike workers’ comp, a third-party claim is a personal injury lawsuit. That means you need to show that the third party acted negligently or wrongfully. But if successful, your recovery can go beyond what workers’ comp allows—you can pursue compensation for:

• Full lost wages (not just partial)
• Future loss of income
• Pain and suffering
• Emotional distress
• Loss of enjoyment of life

Can You File Both Types of Claims?

Yes, and this is an important point. In many cases, you may be able to receive workers’ compensation benefits and also file a third-party personal injury claim. These two systems are separate and serve different purposes.

Workers’ compensation provides quick, no-fault benefits to cover basic needs. A third-party claim, on the other hand, may take longer and requires proving fault—but it allows for a much broader range of compensation. In some situations, this combination can significantly increase the total recovery available to you.

However, California law prevents “double-dipping.” If you recover compensation from a third-party lawsuit, your workers’ comp insurance provider may be entitled to be reimbursed for the benefits it already paid. This is called a lien and is outlined in California Labor Code Section 3856. Though it might reduce the net amount you take home from the lawsuit, the overall total can still be much greater than relying on workers’ comp alone.

Real-World Examples of When Third-Party Claims Apply

Workplace injuries happen in all kinds of settings, and not all of them are caused by your employer or a co-worker. Here are some common examples where a third-party claim might apply:

If you’re injured in a car crash while driving for work, and the other driver is at fault, you can file a third-party claim against that driver. If you’re hurt by falling equipment that was installed by an outside contractor, you may have a claim against the contractor. If a customer, client, or visitor causes your injury, they could be held liable.

Injury from malfunctioning equipment, such as a defective ladder, may also point to a third-party product liability case. Likewise, if your injury happens on a site not owned or maintained by your employer, the property owner may bear responsibility.

These situations show how third-party claims can arise from ordinary work scenarios. If anyone besides your employer played a role in your injury, it’s worth exploring whether a third-party claim is possible.

How Compensation Differs Between the Two Options

One of the biggest distinctions between workers’ compensation and third-party claims is the amount and type of compensation available.

Workers’ comp typically pays only a portion of your lost wages (around two-thirds), and it does not cover non-economic damages such as pain and suffering. It is designed to meet basic needs, not to fully compensate for everything you’ve lost.

Third-party claims, on the other hand, can offer full compensation for your injuries. If you prove that the third party was at fault, you may be entitled to recover not just medical bills and lost income, but also for future income loss, physical pain, emotional anguish, and long-term effects on your life.

The potential for higher compensation is one of the main reasons injured workers often pursue both avenues if a third party is involved.

Important Deadlines to Keep in Mind

California law sets strict deadlines for filing both types of claims. For workers’ compensation, you must notify your employer within 30 days of the injury and file a formal claim within one year, according to California Labor Code Section 5405.

For third-party lawsuits, the general statute of limitations is two years from the date of the injury, according to California Code of Civil Procedure Section 335.1. Failing to act in time may result in losing your right to pursue either type of claim.

Because these timelines can overlap—and because workers’ comp and third-party cases involve very different legal procedures—it’s crucial to act quickly and keep good records of your work-related injuries, treatments, and interactions.

Contact Los Angeles Work Injury Lawyers Samer Habbas

If you’ve been hurt at work but believe someone outside your employer may also be responsible, you could have more options than you think. The path to full compensation may involve both workers’ compensation and a third-party claim, and knowing how they work together can make a significant difference in your recovery.

To learn about your rights and understand what you may be entitled to under California law, contact Law Offices of Samer Habbas & Associates by calling 949-727-9300 or contacting us online for a free consultation with a Los Angeles personal injury attorney. We’re here to help you understand your options and take the right steps toward the compensation you deserve.