Lien — Insurance Claims Definition
Workers Comp
A legal claim against a settlement or award for reimbursement, such as a workers comp carrier's lien on a third party recovery.
When a worker collects from a negligent third party after WC paid benefits, the comp carrier may assert a lien to recover some payments. Rules vary widely by state (full, proportional, or reduced by attorney fees).
Examples
WC pays $50,000 medical; worker sues a negligent manufacturer and wins $200,000; carrier recovers a statutory share via lien.
Common Mistakes
Settling third party cases without protecting the lien exposes attorneys to carrier claims. Ignoring Medicare future medical set-asides in related settlements.
