What happens to my workers’ comp benefits if my insurance provider goes bankrupt?

Although most injured employees eventually return to work, the workers’ compensation system provides benefits that could potentially last for the rest of an employee’s life. If your benefits suddenly stop because the insurance company is no longer in business, you still have options. Talking with a workers’ compensation attorney about those options is beneficial for continuing compensation. Workers' comp when the insurer goes bankrupt

Collecting Workers’ Comp After an Insurer Goes Bankrupt

Employees who are receiving permanent partial disability benefits can be forced into serious physical and financial difficulties if an insurer can no longer provide benefits. If your workers' compensation benefits have been suspended due to bankruptcy, you can seek payment through:

  • A new insurance provider. According to the law, it is your employer’s responsibility to secure workers’ compensation insurance. If your old insurer has gone out of business, it is the employer’s duty to secure a new policy or self-insure, meaning the company itself would be liable for your injury payments.
  • Your employer. If your employer has allowed insurance to lapse and has not secured a new policy, employees can sue the employer directly to recover the costs of an injury. If the employer and insurer have both filed for bankruptcy, employees can seek compensation from the Uninsured Protection Fund.
  • The Uninsured Protection Fund. In March, Rhode Island lawmakers passed an amendment to the Rhode Island Uninsured Protection Fund (UPF) guaranteeing injury payments for employees of uninsured employers. The fund provides payment for disability (incapacity) and reimburses the employee for any court costs needed to pursue the case. However, the UPF does not pay for past or future medical expenses, loss of function, or disfigurement.

The attorneys at Kirshenbaum & Kirshenbaum can answer your questions and help you through the claims process at no cost to you. To speak with a member of our team, simply fill out the online contact form on this page, or give us a call.