When an employer files for bankruptcy, it is only natural to worry about the future of your workers’ compensation. This is especially true if you rely on these legal protections to make ends meet during recovery.
Fortunately, workers’ comp benefits usually come from an insurance policy, not directly from the employer. This means the insurance company will pay your benefits even if your employer cannot.
The law protects the rights of injured workers
If your employer goes out of business, here is what usually will happen:
- Insurance coverage remains: Workers’ comp insurance is often separate from the employer’s finances. The insurer will continue sending the monthly checks for which you are eligible.
- State guaranty funds: If the insurance company itself goes bankrupt, state guaranty funds may step in and shoulder the payment of your benefits.
- Self-insured employers: If a self-insured employer declares bankruptcy, the state may take over the claims. Florida has a Self-Insurers Guaranty Association for this purpose.
Florida’s workers’ compensation law requires most employers to carry insurance. Your employer contributes to or should have regularly contributed to its insurance policy to ensure funds are available if an employee gets hurt and even if they are in a financial crisis.
This unique situation may present challenges
Despite legal protections, you may still encounter challenges obtaining your workers’ comp benefits if your employer is no longer in business.
For example, you might have had special light-duty accommodations that other companies do not offer. In such cases, the insurance company may find it difficult to compare your skills to available jobs and assess your earning capacity.
Is your claim new and still under investigation? Collecting information from your now-defunct employer to verify your claim might be tricky. This delay might postpone the start of your benefits.
These issues may spark disputes over how much benefits you should receive and for how long. They might push for benefit reductions or termination. When confronted with these obstacles, do not hesitate to consult a workers’ comp attorney in Florida to secure your rightful compensation.