Workers' Compensation-Second Injury Fund and Uninsured Employer Fund
Workers’ compensation claims can be complicated when an individual has suffered an injury while employed with one company and then goes to work for another company and later reinjures him- or herself. Which employer is going to be responsible for that compensation?
Some states have set up what is referred to as a second injury fund. In these states, that second injury will be partially paid out of that second injury fund and then also partially paid by the second company. That second injury fund is a fund of money that is created by contributions from all of the different insurance companies that underwrite workers’ compensation insurance coverage in that jurisdiction.
A similar type of fund that may exist is the uninsured employer’s fund. An employer who has not taken out workers’ compensation coverage and who therefore cannot pay the benefits called for under the workers’ compensation act may still be covered in the sense that the employee may make a claim against the uninsured employer’s fund. To the extent that any payments are made out of that fund, the fund administrator or the attorney general of that state will typically make a claim against the uninsured employer in order to recover such payments.
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