You are in big trouble. It seems like they are employees. You should consult a lawyer. If they are employees and you do not have worker's compensation insurance then you are responsible for everything if you or an employee is even 1% liable.
Maybe you need a civil attorney and maybe you need a bankruptcy lawyer. Another important question is what form of business you had. If it was a sole proprietorship the plaintiff's attorney will be able to go after you personally. Even if it was an LLC, it is sometimes possible to go after your personal property.
First, you are not automatically negligent just because one laborer injured another. To prevail on a negligence claim, the injured worker would still have to prove the existence of a legal duty, a breach of that duty, and damages proximately caused by the breach. Employees may be injured without any negligence on the part of the employer. Second, based on th e limited facts provided, I would likely argue thatthe individuals were contract labor. Third, “you” should not argue anything, you need to hire an attorney to represent you in this matter. You should also make sure you have notified your insurance carrier if you have not already done so. If you do not have an attorney, I would be happy to speak with you.
Get an attorney. The case can be defended (with chances of success not being guaranteed), but only if you treat the matter seriously and get counsel to speak up on your behalf.
My answers to the questions are for general informational purposes only and do not establish an attorney-client relationship. Accuracy of answers is not guaranteed, as my answers contain broad assumptions -- as such, you may not be able to rely on the answer under the facts of your specific case. There are no "one size fits all" legal solutions because even slight changes in fact situations may require a material variance in the applicable advice. Once again, I am not your attorney.