What does "subrogation" mean in the context of workers' compensation?

In the context of workers' compensation, "subrogation" refers to the right of the insurance carrier to recover costs from a third party that is deemed responsible for an employee's injury. This typically occurs when a worker is injured due to someone else's negligence or actions. In such cases, the workers' compensation insurer pays out benefits to the injured employee for medical expenses, lost wages, and other related costs. Subsequently, the insurer can pursue the responsible third party to recoup those costs through a process known as subrogation.

This mechanism ensures that injured workers receive the benefits they need while also allowing insurers to mitigate their financial losses by holding liable parties accountable. It plays a crucial role in the overall functioning of the workers' compensation system by incentivizing all parties to maintain safety and accountability in the workplace and on the job.

The other options presented do not accurately describe subrogation. Negotiating better worker benefits pertains to collective bargaining or benefit adjustments, while higher premiums are typically a result of various factors including claims history, not subrogation. Finally, the appeal process for claim denials does not relate to subrogation but rather to challenging decisions made regarding claims.