What is the purpose of "subrogation" in workers' compensation?

Subrogation in workers' compensation plays a crucial role by allowing insurers to seek recovery from a third party that may be responsible for an employee's injury. When an employee is injured due to someone else's negligence, the workers' compensation system provides benefits to the injured worker, regardless of fault. However, if it is determined that another party is liable for the worker’s injury, the insurer has the right to pursue that third party for reimbursement of the compensation benefits it has already paid.

This process helps to achieve a fair allocation of financial responsibility. Insurers can recover costs from the liable third party, which can ultimately help keep insurance premiums in check because the insurer can recoup some of its losses. Additionally, it ensures that the injured worker can receive their due benefits while the insurer works to recover funds, promoting accountability among parties involved in potential negligence.

The other options do not encapsulate the primary function of subrogation. Reducing insurance premiums is a possible secondary benefit of subrogation, but it is not the purpose of the procedure itself. Expediting payment of claims is more about the efficiency of claims processing rather than recovery from third parties. Increasing penalties for fraud addresses a different concern within the workers’ compensation system and is not related to the principle