KRS 342.700: Remedies when third party is legally liable -- Liability and indemnification

rights of principal contractors, intermediates, and subcontractors --

Requirement of waiver of remedies for award of contract unlawful.

(1) Whenever an injury for whic h compensation is payable under this chapter has been

sustained under circumstances creating in some other person than the employer a

legal liability to pay damages, the injured employee may either claim compensation

or proceed at law by civil action again st the other person to recover damages, or

proceed both against the employer for compensation and the other person to recover

damages, but he shall not collect from both. If the injured employee elects to

proceed at law by civil action against the other pe rson to recover damages, he shall

give due and timely notice to the employer and the special fund of the filing of the

action. If compensation is awarded or paid under this chapter, the employer, his

insurance carrier, the special fund, the Kentucky coal w orkers' pneumoconiosis

fund, and the uninsured employer's fund, or any of them, having paid the

compensation or having become liable therefor, may recover in his or its own name

or that of the injured employee from the other person in whom legal liability for

damages exists, not to exceed the indemnity and medical expenses paid and payable

to or on behalf of the injured employee, less a pro rata share of the employee's legal

fees and expense. The notice of civil action shall conform in all respects to the

requirements of KRS 411.188(2).

(2) A principal contractor, intermediate, or subcontractor shall be liable for

compensation to any employee injured while in the employ of any one (1) of his

intermediate or subcontractors and engaged upon the subject matter of the contract,

to the same extent as the immediate employer. Any principal, intermediate, or

subcontractor who pays the compensation may recover the amount paid from any

subordinate contractor through whom he has been rendered liable under this section.

Every claim to compensation under this subsection shall in the first instance be

presented to and instituted against the immediate employer, but the proceedings

shall not constitute a waiver of the employee's rights to recover compensation under

this chapt er from the principal or intermediate contractor nor shall the claim be

barred by limitations, if the claim is filed against the principal or intermediate

contractor within one (1) year after a final unappealed order has been rendered by an

administrative law judge determining that immediate employer has insufficient

security to pay the full and maximum benefits that could be determined to be due

him under this chapter. The collection of full compensation from one employer

shall bar recovery by the employee against any other. But he shall not collect from

all a total compensation in excess of the amount for which his immediate employer

is liable. This subsection shall apply only in cases where the injury occurred on, in,

or about the premises on which the pr incipal contractor has undertaken to execute

work or which are under his control otherwise or management.

(3) It shall be considered to be contrary to public policy and unlawful for any owner or

employer to require another employer to waive its remedies gr anted by this section

as a condition of receiving a contract or purchase order. Furthermore, in selecting

between two (2) or more contractors or suppliers, consideration may not be given by

an owner or employer to whether one (1) contractor or supplier vol untarily waives

its remedies under this section or offers to accept lesser compensation than another

contractor or supplier for that waiver of remedies.