Whether you work for a startup that ran out of venture capital or a bank that didn't get a bailout, your employer may be going out of business. But what happens if you have an open workers' compensation insurance claim or you're getting workers' comp when they shut the doors for good?
We know employers must carry worker's comp insurance, but if they're no longer in business, what happens to my benefits?
One Big Pot
Lucky for you, your workers' comp benefits aren't coming out of the same business account as petty cash. Each state runs its own workers' compensation system, and all employers must prove they are carrying private workers' comp insurance coverage. The workers' comp benefits you receive are paid by the private insurers, regardless of whether the company is afloat or not. Your employer should have been paying into their workers' comp insurance policy on a weekly or monthly basis, but they weren't necessarily paying your specific benefit amount each week. So even if they stop paying, your benefit doesn't stop.
So while your employer is required to have workers' comp insurance, they are not responsible for paying out benefits; meaning that if they go bankrupt, this should not affect your workers' comp claim or your benefit payments.
A Few Minor Details
Even though you should still receive your workers' comp benefits if your employer goes out of business, there may be some issues that arise. First, if you just started a claim and it is still being investigated, your claim may be delayed if the insurance company is having trouble getting information from your former employer.
Second, some benefits may depend on your ability to return to work. Without your former employer or your former job being around, this may be more difficult to determine, especially if your job was specific to your employer. This could lead to conflicts regarding your benefit payments.
If you've been injured at work, you should file a workers' compensation claim. If you've been denied benefits, or if you're worried your benefits may end, and an experienced workers' comp attorney could help.