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Fairfax, Leesburg & Loudoun, Virginia

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Doug Landau
Doug Landau
Attorney • (866) 735-1102 Ext 610

When the Workers Compensation Insurance Company Goes Broke, Who Pays ?

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Employers of three or more regular workers are supposed to have Workers Compensation Insurance under Virginia Law, or face potential fines and legal action. But what happens when an employer HAS comp insurance, but THAT COMPANY goes out of business ?

Luckily, the Virginia Workers Compensation Act anticipated this problem. The "Uninsured Employer Fund" (or "UEF") is a fund of money to which all employers, including ABRAMS LANDAU, pay a portion of their premiums each year. When a Compensation Insurance Company goes out of business, and there is no money to pay a valid claim, the UEF can "step into the employer and insurer’s shoes" and pay the medical bills, lost wages, medications, transportation and other related expenses. The UEF can then try to go after the insurer and/or employer in order to recoup their payments. So, when an injured worker in Virginia is under the protection of an Award, they can get payment of bills and wages through the Uninsured Employers Fund when the insurance company has gone out of business. This is an important protection available to Virginia workers who have been injured or who have sustained a compensable occupational disease under the Workers Compensation Law. While the UEF has no authority to settle claims, the Fund CAN pay permanent injury Awards; home improvement expenses and Cost of Living payments.