New California Law Finally Puts Injured First Responders First

RYAN T. TROTTA
Partner
Ferrone Law Group

For years, peace officers and firefighters injured by negligent third parties faced a harsh reality: even when they successfully pursued a personal injury claim, they often walked away with little or nothing. Workers’ compensation liens and future benefit credits routinely consumed third-party settlements, forcing injured first responders to pay for their own medical care and disability benefits despite being hurt in the line of duty.

That changed on January 1.

With the passage of Senate Bill 487, California lawmakers enacted one of the most significant reforms affecting injured public safety employees in decades. The new law fundamentally reshapes how personal injury claims and workers’ compensation benefits interact, and for the first time, it clearly prioritizes the injured worker over employer reimbursement.

A Life-Altering Difference: The New Law in Action

Imagine a public safety employee who suffers a spinal cord injury while responding to an emergency call. The injury is permanent, leaving them paralyzed from the waist down, and requires ongoing medical care, home modifications, mobility equipment and attendant care for life. The at-fault driver carries a $1,000,000 auto liability policy, and workers’ compensation pays $500,000 in medical treatment and disability benefits. The employee’s damages alone exceed the policy limits.

Before SB 487, employers recovered first, and workers took what remained. The workers’ compensation insurer could assert a lien for the full $500,000. Because the third-party recovery is limited to $1,000,000, the insurer could claim a substantial portion — often leaving the employee with little to nothing from the personal injury settlement. Worse, the insurer could also apply a credit against future workers’ compensation benefits, meaning medical care, attendant services and disability payments could be delayed or suspended until the lien was satisfied. Despite having a million-dollar settlement in theory, the injured public safety employee could be forced to use their settlement to pay for basic care and lose out on future benefits altogether.

SB 487 amends six sections of the Labor Code: §§ 3852, 3858, 3859, 3860, 3861 and 3862. It shifts the balance between injured public safety workers, their employers and workers’ compensation carriers.

Starting January 1, when insurance policy limits are insufficient to cover both the employer’s claim and the first responder’s proven damages, the new law caps employer and insurer recovery from third-party claims, generally limiting reimbursement to no more than one-third of the available liability insurance in qualifying cases. (If policy limits are sufficient to fully compensate both the employer and the employee, the employer will be paid its full lien and take first priority over the employee’s recovery.)

Further, SB 487 eliminates credits against future workers’ compensation benefits, ensuring that injured workers continue receiving medical treatment and disability payments without having to use their settlement funds first.

Under SB 487, the outcome for the first responder changes dramatically. In our example, because the limits are insufficient to cover both the employer’s and employee’s damages in their entirety, the employer’s recovery is now limited to one-third of the liability insurance limits, or approximately $333,333. The public safety employee is guaranteed at least two-thirds of the recovery, or $666,667, and their workers’ compensation benefits continue into the future, uninterrupted.

The practical implications of this new law also impact settlement discussions, making it easier, faster and more efficient for the public safety employee to receive compensation for their injury. When policy limits are insufficient to make both the employee and employer whole, peace officers and firefighters may now settle directly with a tortfeasor without first requiring the employer to consent to the settlement. The settlement must simply specify that the employer is entitled to reimbursement at a rate not to exceed one-third of the policy limits.

The difference is life-altering. Under the old system, catastrophic injuries often left public safety employees financially vulnerable, even after winning a case or reaching a substantial settlement. SB 487 ensures injured peace officers and firefighters receive the compensation they deserve while protecting their future care and quality of life.

The changes transform personal injury claims from hollow victories into meaningful sources of compensation. For years, pursuing third-party personal injury claims often made little sense for injured first responders because the recovery flowed almost entirely to employers and insurers. SB 487 changes that reality. It allows injured peace officers and firefighters to seek justice without sacrificing future care, financial stability or legally guaranteed benefits, ensuring they can pay for lifetime care, home modifications and specialized medical treatment without sacrificing future benefits.

For first responders injured by negligent third parties, this law represents a long-overdue recognition that those who protect the public deserve real protection when they are hurt.

Important Limitations Under SB 487

It is also important to note that SB 487 took effect at the start of this year. Thus, it appears it will only apply to recoveries that occur on or after January 1, 2026. It will not impact settlements or verdicts that have occurred prior to the effective date. However, it does apply if the injury occurred prior to January 1, 2026, but the recovery has not been determined until after the effective date.

Additionally, the new law only applies to an employee who is a peace officer, as defined in Chapter 4.5 (commencing with Section 830) of Title 3 of Part 2 of the Penal Code, or a firefighter who is employed by any of the following: (A) a city; (B) a county; (C) a city and county; and (D) a fire protection district. It does not apply to public safety employees who work for the state of California, nor to those employed by federal agencies.

What Injured First Responders Should Do Now

If you are a peace officer or firefighter injured by a negligent third party, the rules are changing in your favor — but timing, strategy and experience matter more than ever.

SB 487 makes personal injury claims far more valuable for injured first responders, but insurance companies and public employers will still look for ways to minimize what they pay. How your case is handled from the beginning can determine whether you receive the benefits this new law was designed to protect.

If you were injured on duty, you should not assume that workers’ compensation alone is enough. A third-party personal injury claim may now provide meaningful compensation for pain, suffering and long-term losses — without jeopardizing your medical care or disability benefits. But those claims must be identified, structured and negotiated correctly.

Do not rely on advice from an employer, an insurance adjuster or a general-practice attorney unfamiliar with the intersection of workers’ compensation and personal injury law for public safety employees. This is a highly specialized area, and SB 487 has changed the landscape.

If your injury occurred recently — or even if your case is already pending — you should speak with a lawyer who understands how to maximize recovery under the new law and protect your future benefits.

You put your life on the line for the public. You should not have to sacrifice your financial security to do it.

About the Author

Ryan T. Trotta is a partner at Ferrone Law Group specializing in both personal injury litigation and workers’ compensation.