When a Carrier or Employer files for Insolvency or Bankruptcy

Compensation owed to an injured employee is protected when an employer or carrier files for insolvency or bankruptcy. The carrier is required by law to provide within the insurance policy or contract the following provision: insolvency or bankruptcy of the employer does not relieve the carrier from payment of compensation for disability or death sustained by an employer during the life of such policy or contract. This means even if the employer files for bankruptcy or insolvency, the carrier remains responsible for the compensation of the awarded employees. 

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In addition, a​​ person entitled to compensation has a lien against the assets of the carrier or employer for such compensation without limit or amount upon insolvency, bankruptcy, or reorganization in bankruptcy proceedings concerning the carrier or employer, or both, as well as entitlement to preference and priority in the distribution of the assets of such carrier or employer, or both.

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Notice of Insolvency or Bankruptcy:

It is required for an employer or carrier to notify the Commission of its intent to file for insolvency and bankruptcy within the next 30 days.​​​​