Can I Collect Workers’ Compensation Benefits If My Employer Files For Bankruptcy?

Most employers’ employees are covered by workers’ compensation insurance.  This workers’ compensation insurance is provided by a third party insurance company, not the employer themselves. Insurance companies are required by the state to keep a reserve of money on hand to cover the cost to pay out benefits to the injured worker. Therefore, if your employer files bankruptcy and they had workers’ compensation insurance at the time you were injured, the insurance company will be required to pay you your benefits.

However, there are a few exceptions to this rule, especially if your employer is a large company that is “self insured”.  In the event your employer is self insured, they must usually have a bond through an insurance company that will “guarantee” injured workers receive their benefits in the event the employer files bankruptcy or cannot provide benefits to the injured worker.

Sadly, if your employer does not have workers’ compensation insurance and they file bankruptcy, it may be difficult to collect money from them if you were injured on the job because they are “broke” and you “can’t get water from a dry well.”