Unfortunately, employers and work comp insurance carriers end up filing for bankruptcy. We have added a new section to our website that talks about the two main variations of this problem and how our law firm deals with them.
The first situation is where an employer files for bankruptcy while having a work comp insurance policy that has a very high deductible. Our law firm has successfully argued that Iowa law makes both the employer and the insurance carrier jointly and severally responsible for all of the workers’ compensation liability, including the deductible. Therefore, our law firm has been successful in persuading reluctant insurance companies to pay the entire claim.
The second problem area is when the workers’ compensation insurance carrier becomes insolvent. The insolvency of the insurance company does lead to delays. However, the Iowa Insurance Guaranty Association does step in to cover for the insolvent insurance company. Our law firm has had good success in dealing with the Insurance Guaranty Association.
You can see our new section on Dealing with Bankruptcy by the Employer or the Insurance Carrier here.