The AK Subrogation Trap

Quick Takeaways
* The Trap: Alaska has a “Two-Tiered” statute of limitations. If the employee doesn’t sue the third party in 1 year, the claim is automatically assigned to you.
* The Rule: Alaska Statute 23.30.015 gives you the legal right to “step into the shoes” of the employee to recover your costs.
* The Move: Don’t wait for the employee’s lawyer. If they haven’t filed by month 13, your carrier needs to take over the case to recover your premium dollars.

• Learn More: Agents can see how IWCP membership keeps you ahead. Employers can take control at LockedAndLoadedTraining.com.

Imagine an employee driving a company truck gets rear-ended by a distracted driver. Your workers’ comp carrier pays out $50,000 for back surgery and physical therapy.

Do you assume you’ll get your money back because the other driver was at fault?

In Alaska, waiting for the employee to sue the other driver is risky. While most states give the employee two years to sue, Alaska has a technicality that can cost you.

The 1-Year Automatic Assignment

The rules are clear, but the application is messy.

Under Alaska Statute 23.30.015, an injured worker who accepts compensation benefits has one year from the date of the award to file a lawsuit against the responsible third party.

What happens if they don’t file within that first year? The “cause of action” is automatically assigned to the employer (and the insurance carrier).

Many agents miss this. They wait for the full two-year statute of limitations to expire. By then, the case is stale, the evidence is harder to find, and the “automatic assignment” has been sitting unnoticed for 12 months.

Are you leaving money on the table?

Recovering Your Costs (and More)

When the claim is assigned to you, you aren’t just looking to recover that initial $50,000. The statute allows you to recover:
* All medical and indemnity benefits paid.
* The costs of the legal action.
* Payments made to the Second Injury Fund.

If you win a settlement larger than what you paid out, the employee still gets the “excess,” but you get paid first.

Think of it like getting paid before everyone else in line.

The “Made Whole” Conflict

Alaska courts generally protect workers, but the subrogation statute is clear: The carrier has a lien on any recovery. However, that lien is reduced by your pro-rata share of the employee’s attorney’s fees.

If the employee’s lawyer does all the work, they get a “cut” of your recovery. This is why it’s often smarter for the carrier to be proactive once the 1-year mark hits.

Master the playbook and take control.

Frequently Asked Questions (FAQs)

Does the employee have to choose between comp and a lawsuit?

No. They can do both. But they can’t “double dip.” The workers’ comp carrier gets reimbursed from the lawsuit proceeds.

What if the employee settles without telling us?

They can’t legally do that. You have a statutory lien. If the third-party carrier pays the employee directly without satisfying your lien, they may have to pay you again.

Does this apply to car accidents only?

No. It applies to any third party—equipment manufacturers (product liability), property owners (premises liability), or other contractors on a job site.

The Technical Edge

In the “Last Frontier,” subrogation is a race against the clock.

If your agency isn’t tracking the 1-year anniversary of every third-party injury, you are leaving money on the table. Our 14-Point Forensic Review tracks these dates to ensure your carrier is aggressively pursuing recoveries.

Don’t let $50,000 walk away due to standard industry inertia. Think of it like getting a speeding ticket because you missed the speed limit sign.

Take control of your process through professional stewardship. Agents can learn the protocols at the Institute. Employers can take control of their costs at LockedAndLoadedTraining.com.

Fortune favors the bold.

I’m around this afternoon if you want to chat.

Master the rules and take control.