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Will I Still Get Workers Compensation Benefits If My Employer Goes Out Of Business

If your employer is going out of business, you may be wondering, "Will I still receive workers' compensation after business closure"? You receive benefits from your employer's workers' compensation insurance company and the state. If your employer closes down, you should still receive your benefits as long as you still qualify.
An employer could go out of business at any time. But, for injured employees currently receiving workers’ compensation insurance benefits, there may be some confusion as to how those benefits work after an employer shuts down. Employers are required by Iowa law to have workers’ compensation insurance coverage, but after they go out of business, your open claim may become more complex.

Will I Still Receive Workers' Compensation After Business Closure?

The short answer is, yes. But it depends on whether you qualify for workers' compensation benefits. What's more, if your employer closes down in the midst of the claims process, then it may be more complicated to finalize the claim. Part of the reason is that vital records may be thrown out as your employer goes through the process of closing down the business. Taking a proactive approach to your claim and your benefits is important to protecting your right to benefits and key evidence you might need. A workers' compensation attorney can help you pursue a benefits claim even if your employer's business closes down. He or she can help you locate evidence that you need to prove your claim and that you should be receiving benefits even after your employer goes out of business. Plus, the attorney will understand what paperwork to file to help ensure that there is a minimal or no interruption to your receipt of benefits.

The State and Workers’ Compensation

Workers’ compensation benefits do not come from the same financial pot as your employer’s resources, and it is not associated with an employer’s petty cash or revenue. Instead, the state runs its own workers’ compensation system, and your employer is required to carry insurance to be in compliance with the law. The benefits you receive with your open claim are then fulfilled by your employer's private workers' compensation insurance company – regardless of whether your employer’s business is still operating. An employer would have been paying into a workers’ compensation insurance policy weekly or monthly, even though they were not specifically paying your benefit amount. So, if an employer stops paying because they have closed down, the benefits will not stop. It is important to note that the employer is required to carry workers’ compensation insurance, but they are not the ones responsible for paying your actual benefits. They can go bankrupt, and it will not impact your ability to collect benefits on your claim.

How Does a Business Closure Affect Workers' Compensation?

Even though you are entitled to workers’ compensation benefits regardless of a company’s operational status, you may encounter some issues after an employer closes their doors.  If the claim was just started, and it is still under investigation, the claim could be delayed by the insurer when they have difficulty receiving information from the employer. Also, some benefits and payments will depend on your ability to return to work. If your former employer or job is not available to provide you with a job when you are able to return, it can be more difficult for an insurer to prove your work status. This could result in conflicts of benefit payments. Regardless, if you have been injured at work, you are still entitled to workers’ compensation benefits. If your employer chooses to shut down, you should still receive such benefits. Speak with a workers’ compensation attorney in Iowa by contacting the Pothitakis Law Firm, P.C. today regarding your claim. We can assist you with the issues that can arise after an employer shuts down. These situations can be even more complicated if the employer disputes the workers' compensation claim. But we are no stranger to these situations. We will do everything we can to help ensure you get the benefits you need. Call us at (319) 318-0450 or fill out an online contact form to schedule a consultation.