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What Happens to Your Workers’ Compensation if Your Company Goes Out of Business?

Getting injured on the job is never easy. You must fill out paperwork and see specific doctors to get the care you need to heal fully. Your employer must apply for workers’ compensation benefits on your behalf. But what happens if your company goes out of business while you are involved in a  workers’ compensation claim?

What is Workers’ Compensation Insurance?

Workers’ compensation (WC) insurance is a policy that most employers are required to carry to cover work related injuries and losses. The state determines laws regarding workers’ compensation, and if a company has a specific number of employees, it must acquire a policy and pay regular premiums. That way, they are covered if any of their employees are injured on the job.

In most cases, Workers’ compensation benefits do not come from your company’s bank account or their cash reserves. Instead, it works like every other insurance policy where the policyholder pays premiums, and the insurance company pays out when someone files a claim.

Will I Continue to Receive Payments?

Even if your company goes out of business, the workers’ compensation insurance company will continue to pay your benefits. Your employer is not the one paying your direct benefits; the insurance company with which they had a policy is paying you. If the employer is a self-insured the issues become more complex, but the obligation to provide continuing benefits remains the same

As long as your company has paid the insurance premiums, you will continue to receive your benefits long after your company is gone. So even if your company doesn’t close but files for bankruptcy, you would still receive your benefits.


Complications arise when your claim is still pending, and your employer shuts down. It can take longer for the insurance company to process your paperwork and start paying your benefits.

The situation can quickly turn complex because as your company shuts down, there may not be someone to supply the WC insurance company with additional documents, evidence, paperwork, and medical bills. Additionally, some documentation may be lost altogether.

If you are in the very beginning stages of filing a claim, the insurance company may be trying to determine if you are eligible for benefits and if there is no one left at the company to help, it could cause significant delays with your payments.

Where to Turn for Help

In these situations, it is essential to turn to a workers’ compensation attorney for help. They will know exactly what to do and who to contact to get the necessary paperwork and evidence to get your claims pushed through. Regardless of whether your company is out of business or not, an experienced workers’ compensation lawyer can help you get the benefits you need as quickly as possible. Contact Barry Stein today to see how we can help.

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