Which term describes a situation where an employee sues a third party who is indemnified by the employer?

Which term describes a situation where an employee sues a third party who is indemnified by the employer?

• A. Vicarious Liability
• B. Statutes
• C. Subrogation
• D. Third-party Action-over Claim

Answer: (D)

When a claim pits an employee against a third party who is protected by indemnity from the employer, that situation is described as a third-party action-over claim. The idea is that the insured (the employer) has an indemnity arrangement with the third party, and the employee’s suit against that third party sets up a secondary action where the employer may pursue reimbursement from the third party for any indemnified losses or defense costs. This is distinct from vicarious liability (the employer being liable for the employee’s actions) and from subrogation (the insurer stepping into the insured’s rights after paying a claim). The term “action-over” captures the chain where the third party, indemnified by the employer, can be pursued for indemnity after the initial claim arises.

When a claim pits an employee against a third party who is protected by indemnity from the employer, that situation is described as a third-party action-over claim. The idea is that the insured (the employer) has an indemnity arrangement with the third party, and the employee’s suit against that third party sets up a secondary action where the employer may pursue reimbursement from the third party for any indemnified losses or defense costs. This is distinct from vicarious liability (the employer being liable for the employee’s actions) and from subrogation (the insurer stepping into the insured’s rights after paying a claim). The term “action-over” captures the chain where the third party, indemnified by the employer, can be pursued for indemnity after the initial claim arises.