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Workplace Injuries When Employer Has Failed to Purchase Workers Compensation Insurance


Each year, thousands of North Carolina businesses illegally fail to purchase Workers Compensation insurance and thereby place their employees at risk of catastrophic loss. The problem was discussed at length by the News and Observer in this April 1, 2012 article. Fortunately, under certain situations, the employee may have an additional right not discussed in the News and Observer article; the employee may be able to sue their employer for negligence. If the employee can prove his or her case, a negligence suit permits a verdict of significantly higher damages (although, collecting the judgment remains a concern under either system). To speak with a Raleigh personal injury attorney regarding whether a negligence suit is appropriate in your case, contact Maginnis Law at 919.480.8526 or send a confidential email using our contact page.

North Carolina law requires employers who regularly employ three or more persons to purchase Workers Compensation insurance or to certify as a self-insured. Failure to do so can subject the employer to harsh penalties from the State, but these penalties are only assessed after there has been an accident. This is often of little help to the employee who now faces the possibility of paying tens of thousands of dollars of medical bills with no help from a Workers Compensation insurance policy. The situation is made even worse when the employee is permanently disabled and cannot go back to work.

One option the injured employee may have in this situation, which employees of covered employers do not, is the right to file a negligence suit in the North Carolina trial courts. That is, the injured employee may not be limited to presenting his or her case to the North Carolina Industrial Commission. The North Carolina Workers’ Compensation Act provides that if “the employee and the employer are subject to and have complied with the provisions of this Article, then the rights and remedies herein granted to the employee . . . shall exclude all other rights and remedies of the employee . . . against the employer at common law or otherwise on account of such injury or death.”  N.C.G.S. § 97-10.1. The argument is that if the employer has not complied with the provisions of the Workers Compensation Act, i.e. purchased insurance, then it is not entitled to the protection of the limited damages set forth by the Act. While there has been no North Carolina appellate court to decide the issue definitively, other states have allowed injured employees of uninsured employers to sue for negligence.

There are a couple of important considerations when deciding to sue for negligence. First, in order to proceed in tort, the injury must not be the employee’s fault. General rules of negligence will apply, so this means that North Carolina’s harsh contributory negligence rule is in effect. That rule was discussed by our blog here. Second, the value in a negligence suit is the ability to recover additional damages for pain and suffering, among other things. As many employees have learned, there is no recovery for your pain and suffering in the Workers Compensation system.

Maginnis Law handles all injury cases on a contingency basis and offers free consultations from our Raleigh office. To discuss your uninsured workplace injury with a Raleigh attorney, call Maginnis Law at 919.480.8526 or send a confidential email via our contact page. Our firm regularly handles cases in and around the Triangle area, including: Raleigh, Durham, Cary, Apex, Morrisville, Clayton, and Wake Forest.

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