Does Workers' Comp Take Money From My Personal Injury Settlement in Virginia?

 Posted on July 11, 2026 in Personal Injury

If you got hurt at work because of someone other than your employer, you may be able to file two claims: a workers' compensation claim and a separate injury lawsuit against the at-fault party. This can happen if a careless driver, a subcontractor, or an equipment maker caused your injury. When both claims exist, Virginia law lets your employer's workers' compensation insurer be reimbursed from part of a personal injury settlement.

If you got hurt at work in 2026 and you are working on a third-party claim along with your workers' comp benefits, a Boyce, VA workers' compensation lawyer can explain how much of your settlement the insurer can claim.

How Does a Workers' Compensation Lien Work in a Virginia Third-Party Case?

A lien gives your employer's insurer the right to be repaid from your third-party settlement or court award. Under Virginia Code Section 65.2-309, this lien starts as soon as you take workers' comp benefits for a job injury. The insurer can generally recover the workers' compensation benefits it has paid, including medical expenses and wage-loss benefits.

Workers' compensation does not compensate injured workers for pain and suffering, which is one reason third-party claims can provide compensation that workers' comp alone cannot. The insurer also cannot settle its lien claim without the injured worker's approval and the Virginia Workers' Compensation Commission's approval, the state agency that oversees workers' comp claims and disputes in Virginia.

What Percentage of a Settlement Goes to the Workers' Comp Insurer in Virginia?

The U.S. Bureau of Labor Statistics reported 2.5 million nonfatal workplace injuries and illnesses in 2024. When someone other than an employer contributes to a workplace injury, both a workers' compensation claim and a third-party personal injury claim may be available.

The insurer often does not collect the full amount of its lien. Under Virginia law, the insurer generally has to bear a proportionate share of the attorney's fees and litigation costs that produced the recovery, and that share comes out of the lien before the insurer gets paid.

If your lawyer's fees equal about one-third of your total recovery, the insurer's lien usually gets reduced by close to that same one-third. For example, if the insurer paid $30,000 in medical bills and lost wages, it might walk away with closer to $20,000 after subtracting its share of legal costs. This rule keeps the insurer from doing any legal work but still collecting a full lien for free.

How Does a Third-Party Settlement Affect Future Workers' Comp Payments in Virginia?

After the insurer is reimbursed for its lien, the remaining net recovery generally operates as a credit against future workers' compensation benefits. The insurer receives a credit against future benefits until that credit is exhausted.

This credit is based on your net settlement, not the full settlement figure. Your net settlement is what is left after your lawyer's fees and case costs. For example, say you settle for $100,000, and your lawyer's fees and costs total $35,000. The credit is then based on the remaining $65,000.

Once your future medical bills or lost wages use up that credit, you can receive workers' comp benefits directly again by sending the insurer proof of your ongoing costs.

What Happens If You Settle a Third-Party Case Without the Insurer's Consent in Virginia?

Settling your third-party case on your own can put your future workers' comp benefits at risk. Virginia Code Section 65.2-309 gives the employer a lien on the settlement. If the lien is not resolved before settlement funds are paid out, the employer may seek a credit against future benefits or file a civil action to recover the lien.

If you leave the insurer out of that decision, it can ask the Commission to pause your future benefits until the lien gets paid. This risk applies even if you did not know your third-party case affected the lien. Before you sign anything, make sure your settlement includes three things:

• Written proof of the insurer's consent, or approval from the Commission
• A clear breakdown of the exact lien amount
• Confirmation that the fee-sharing reduction was applied correctly

This step is easy to skip when an insurer pushes for a fast settlement, but confirming it protects your future medical and wage benefits under both claims.

Contact a Prince William County, VA Workers' Compensation Lawyer Today

If a lien is inflating what you owe, you deserve lawyers who will push back. At Parthemos, Curran, Buelow and Polizzi, PLLC, we won't take on a case unless we are ready to fight for it in court, and with more than 120 years of combined experience, we often handle tough claims that other firms turn down. We stay in close contact with our clients throughout the whole process, so you always know where your case stands. To talk with a Boyce, VA workers' compensation attorney, call 540-662-4222 today for a free consultation.