Workers’ Compensation vs. Third-Party Lawsuit in California

If you were injured at work in California, your case may involve more than workers’ compensation.

Workers’ compensation typically applies to claims against your employer. However, if someone other than your employer contributed to the incident, you may also have a separate third-party injury claim.

Understanding the difference between these two types of claims is critical, because they serve very different purposes and can significantly affect your recovery.

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What Is Workers’ Compensation?

Workers’ compensation is a system that provides benefits to employees injured on the job, regardless of fault.

It typically covers:

Medical treatment
Temporary disability benefits
Permanent disability benefits
Limited wage replacement

In most cases, workers’ compensation is the exclusive remedy against your employer.

What Is a Third-Party Injury Claim?

A third-party claim is a separate lawsuit against someone other than your employer whose negligence caused or contributed to your injury.

This may include:

A negligent driver
A general contractor or subcontractor
A property owner
A manufacturer of defective equipment
A rental or equipment company
A delivery or transportation company
A public entity in certain situations

For example, construction-related cases often involve fact-specific issues discussed in our construction worker third-party injury claims page, while equipment-related cases may involve defective work equipment injury claims.

Key Differences Between Workers’ Compensation and Third-Party Claims

Workers’ compensation:

No need to prove fault
Limited benefits
No recovery for pain and suffering

Third-party claims:

Requires proof of negligence
Allows recovery of full damages
Includes pain and suffering, full lost income, and more

Can You Have Both at the Same Time?

Yes — but only when someone other than your employer is involved.

In California, an injured worker may have both a workers’ compensation claim and a third-party lawsuit at the same time when someone other than the employer contributed to the injury.

However, workers’ compensation is usually the exclusive remedy against the employer. This means that if the employer is the only potentially at-fault party, a separate lawsuit against them is typically not allowed.

A third-party claim exists only when a different person or entity — such as a negligent driver, another contractor, or an equipment manufacturer — caused or contributed to the incident. You can see how this applies in construction settings on our construction worker third-party injury claims page and in roadway cases on our Caltrans and road worker injury claims page.

When both claims exist, the workers’ compensation carrier may have a right to reimbursement from any third-party recovery, which is commonly referred to as subrogation.

Common Situations Where Both Claims Exist

A worker may have both claims when:

They are hit by a vehicle while working
Another contractor causes the injury on a jobsite
Defective equipment or machinery is involved
A hazardous property condition contributed to the incident
A work zone or traffic-control failure led to the injury

For example, road worker cases often involve traffic exposure and are discussed further in our Caltrans and road worker injury claims page, while equipment-related incidents are covered in our defective work equipment injury claims page.

Why This Distinction Matters

Many workplace injury cases are initially treated as “just workers’ compensation cases” when a deeper investigation may reveal additional liability.

Identifying a third-party claim can significantly change:

The value of the case
The scope of recovery
The number of responsible parties

If you were injured at work in California, the key issue is not just whether workers’ compensation applies. The real question is whether someone else may also be legally responsible.

Workers’ Compensation vs. Third-Party Lawsuit in California