Yes, Reno workers injured on the job may file a third-party claim in addition to receiving workers’ compensation benefits, and Nevada’s SB 258 has changed the rules in ways that favor injured employees. If someone other than your employer caused or contributed to your workplace injury, you could pursue a separate lawsuit against that third party. This applies to construction workers hurt by defective equipment, warehouse employees injured by a negligent subcontractor, and many scenarios where fault extends beyond the employer.
If you were hurt at work and believe a third party shares responsibility, Shook and Stone can help you understand your options. Call 702-570-0000 or reach out online to discuss your case today.
How Workers’ Compensation Works in Reno, Nevada
Nevada requires all private employers with one or more employees to maintain workers’ compensation insurance, which operates as a no-fault system. You do not need to prove employer negligence to receive benefits. In exchange, workers’ compensation serves as the exclusive remedy against your employer, meaning you generally cannot sue your employer directly for additional damages.
Benefits typically include medical treatment and income replacement. Temporary total disability (TTD) benefits in Nevada are paid at 66.66% of the injured worker’s average monthly wage on a biweekly basis. While these benefits provide critical support during recovery, they do not cover pain and suffering or other noneconomic losses. That gap is one reason third-party claims matter for injured workers.
Understanding how workers’ comp in Nevada functions is the first step toward knowing your full legal options. The system protects employers from lawsuits but does not shield negligent third parties. If a party other than your employer played a role in your injury, a separate legal path may be available.
What Is a Third-Party Claim and Who Can File One?
A third-party claim is a personal injury lawsuit filed against someone other than your employer who caused or contributed to your workplace injury. Common examples include equipment manufacturers, property owners, subcontractors, or negligent drivers. These claims exist alongside workers’ compensation and can provide compensation for damages that workers’ comp does not cover, such as pain and suffering and full lost wages.
Reno workers in physically demanding industries often encounter third-party liability situations. A delivery driver struck by a distracted motorist, a construction worker injured by a defective scaffold, or a warehouse employee hurt due to a vendor’s negligence may all have viable claims. These situations illustrate why additional legal remedies beyond workers’ comp can be important.
💡 Pro Tip: Even if you are already receiving workers’ compensation benefits, do not assume that is your only source of recovery. Investigate whether a third party contributed to your injury, because the deadline to file a separate lawsuit runs independently of your workers’ comp claim.
SB 258 Nevada Workers Comp: What Changed for Injured Workers
SB 258 amends NRS 616C.215, which governs third-party recovery and subrogation rights when an injured employee pursues a tort action while receiving workers’ compensation benefits. Before this law, insurers could recover large portions of a worker’s third-party settlement. SB 258 shifts the balance in favor of injured workers in several key ways.
Caps on the Insurer’s Lien Recovery
Under SB 258, the workers’ comp insurer’s lien recovery is capped at the lesser of the full lien amount or one-third of the total third-party recovery. This ensures injured workers retain at least two-thirds of their settlement or verdict before accounting for their own legal costs. Before this change, insurers could claim a much larger share, leaving workers with far less than expected.
Protections for Medical and Income Benefits
The law prohibits workers’ comp insurers from reducing future medical benefits as offsets. Reductions to income benefits are limited to one-third of each payment and stop once the worker’s “net recovery” is offset. Your ongoing medical care remains protected even after you receive a third-party settlement.
Insurer’s Lien Is Reduced by a Share of Legal Costs
When the one-third lien cap applies, the insurer’s lien is further reduced by 50% of the reasonable litigation expenses incurred by the injured worker in prosecuting or settling the third-party claim. These expenses must be verified by a certified public accountant and are subject to judicial review. This prevents insurers from benefiting fully from a worker’s recovery without bearing any expense of obtaining it.
💡 Pro Tip: Keep detailed records of all legal expenses related to your third-party claim. Under SB 258, those costs may reduce the workers’ comp insurer’s lien, but proper documentation, including CPA verification, strengthens your position.
| SB 258 Protection | What It Means for Injured Workers |
|---|---|
| Lien cap at one-third of recovery | You keep at least two-thirds of your third-party settlement before your own legal costs |
| No offset against future medical benefits | Your medical treatment continues without reductions |
| Income benefit offset limited to one-third per payment | Your biweekly checks are not drastically reduced |
| Lien reduced by 50% of litigation expenses | The insurer’s recovery is reduced to account for your costs in obtaining the settlement |
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How the AmTrust North America v. Vasquez Decision Shaped This Law
The Nevada Supreme Court’s 2024 decision in AmTrust North America, Inc. v. Vasquez clarified that workers’ comp insurers hold a lien on the total proceeds of an injured worker’s third-party recovery, including noneconomic damages, under NRS 616C.215(5). The court overruled earlier decisions in Breen v. Caesars Palace and Poremba v. Southern Nevada Paving, abandoning the Breen formula that had allocated litigation fees and costs against the insurer’s lien.
The court emphasized that changes to the subrogation framework must come from the legislature, not the courts. That recognition set the stage for SB 258. The legislature responded by enacting protections that limit how much of a worker’s recovery the insurer can claim, directly addressing concerns raised by the AmTrust v. Vasquez ruling.
💡 Pro Tip: If your third-party case was already pending when SB 258 took effect on May 31, 2025, you may still benefit from the new protections. The law applies to all cases in which a final judgment, settlement, or disposition had not been entered by the effective date.
Key Procedural Requirements Under SB 258 for a Reno Workers Compensation Attorney to Navigate
SB 258 introduces specific procedural steps that injured workers and their attorneys must follow. Failing to meet these requirements could jeopardize your recovery.
Pre-Litigation Notice
Before initiating third-party proceedings, you must provide pre-litigation notice to the workers’ comp insurer. This gives the insurer an opportunity to be aware of and potentially participate in the claim. Skipping this step could create procedural issues.
Lien Payment Deadlines
Any owed lien must be paid within 15 days of receiving the lawsuit settlement, along with a breakdown of how the settlement is distributed. The worker’s attorney and the third party’s insurer may both be held responsible if the lien is not paid on time.
💡 Pro Tip: Make sure your attorney sends the required pre-litigation notice to the workers’ comp insurer before filing any third-party lawsuit. This procedural step is easy to overlook but is now required under NRS 616C.215 as amended by SB 258.
When Workers’ Comp Is Not Enough: Pursuing a Third-Party Injury Claim in Reno
Many Reno workers discover that workers’ compensation benefits alone do not fully address their losses. TTD payments replace only about two-thirds of your wages, and the system does not compensate for pain, suffering, or diminished quality of life. When a negligent third party contributed to your injury, a separate lawsuit can bridge that gap. Workers in construction, warehousing, and similar industries frequently encounter situations where workers’ comp is not enough on its own.
SB 258 makes these crossover cases more financially viable for injured workers. With the insurer’s lien capped, medical benefits protected from offsets, and litigation expenses reducing the lien, pursuing a third-party claim is less risky than before. A Reno workers compensation attorney can evaluate whether your situation involves potential third-party liability and help you understand what SB 258 means for your case.
💡 Pro Tip: The retroactive application of SB 258 means that even if your injury occurred before the law passed, your case may benefit from the new protections as long as a final judgment, settlement, or disposition had not been entered by the effective date of May 31, 2025.
Frequently Asked Questions
1. Does SB 258 apply to cases that were already open before the law passed?
Yes. SB 258 applies to all cases in which a final judgment, settlement, or disposition had not been entered by its effective date of May 31, 2025. If your case was still open when the law took effect, the new protections generally apply.
2. Can the workers’ comp insurer take my entire third-party settlement?
No. Under SB 258, the insurer’s lien recovery is capped at the lesser of the full lien amount or one-third of the total third-party recovery. You should retain at least two-thirds of your settlement, and the lien may be further reduced by your litigation expenses.
3. Will my medical benefits be reduced after I settle a third-party claim?
SB 258 prohibits workers’ comp insurers from reducing future medical benefits as offsets. Income benefit reductions are limited to one-third of each payment and cease once your net recovery is offset. Your ongoing medical care remains protected.
4. Do I have to notify the workers’ comp insurer before filing a third-party lawsuit?
Yes. The law requires pre-litigation notice to the workers’ comp insurer before third-party proceedings are initiated. Additionally, any lien owed must be paid within 15 days of receiving the settlement, along with a distribution breakdown.
5. How does SB 258 affect the workers’ comp insurer’s share of my legal costs?
Under SB 258, when the one-third lien cap applies, the insurer’s lien is further reduced by 50% of the reasonable litigation expenses you incurred in pursuing the third-party claim. These expenses must be verified by a certified public accountant and are subject to court review.
Protecting Your Rights After a Reno Workplace Injury
SB 258 represents a meaningful shift in Nevada law that strengthens protections for injured workers pursuing third-party claims alongside workers’ compensation benefits. From capping insurer liens to safeguarding medical benefits and reducing the lien to account for litigation costs, the law addresses imbalances that previously disadvantaged Reno workers. However, these cases involve complex procedural requirements and tight deadlines that demand careful attention.
If you or a loved one suffered a workplace injury in Reno and a third party may be at fault, Shook and Stone is ready to help you navigate the process. Call 702-570-0000 or contact us today for a case evaluation.
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