Can You Still Get Workers Comp if the Company Goes Out of Business

  • Posted on: Sep 15 2022
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Regardless of what the circumstances are for your employer going out of business, it is important to know if you will still receive workers´ comp after the fact. Of course, the employer is obligated to provide the insurance, but will the benefits continue once the doors close forever?

Below, we take a look at what happens with workers´ comp when the company goes under.

A Separate Payment System

You are in luck when it comes to collecting workers´ comp payment benefits because the employer is not the one who pays it. In fact, the state you live in has a system designed specifically for workers´ compensation that requires an employer to provide coverage to employees, which a private insurer pays. For the insurance coverage to be valid, the employer will need to pay its policy payments either weekly or monthly. However, when the employer stops making payment on the policy, your benefit payments will continue.

So although your employer covers you while working, they are not obligated to pay for your injury benefits. So when the employer becomes bankrupt, the claim that you are collecting on will not be affected

When the Insurance Company Becomes Bankrupt

If your employer is in business but the insurance company who provides workers´ comp benefits becomes bankrupt, then the employer will need to acquire another insurance provider or be willing to provide benefits out of pocket.

Also, your state will help to get the insurance coverage transferred to a different carrier. If anything, the state may continue to provide the insurance coverage as long as the policy is paid. But who supplies that funding?

When the claims cannot be covered by the insurance company, the remaining assets of the company will be used to make payments. When it comes to workers´ compensation, the payout cap is unlimited.

Things To Keep In Mind

Although your workers´ comp benefits will continue if the business closes, you may still experience issues. The first issue is a delay in payments while your claim is being processed. This delay may also occur when the new insurance provider is getting in touch with the employer to fine tune the benefits and job injury..

The other thing to keep in mind is that the benefits will be dependent upon your capability to work again. When your employer is out of business, they may not be able to verify any specifics. You may see conflicts arise which may affect payments.


When a work injury occurs, a workers´ comp claim needs to be filed. You can rest assured that your payments will continue regardless of your employer going out of business. However, if you have any questions regarding this, then you can give us a call now and we will get it all straightened out for you.

Posted in: Blog, Workers Compensation Benefits

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