In a workers' compensation claim, the guaranty association covers what amount?

In a workers' compensation claim, the guaranty association covers what amount?

• A. The full amount of the claim
• B. Up to $100,000
• C. Up to $50,000
• D. Up to $300,000

Answer: (A)

The key idea is that guaranty associations step in to ensure payment of claims when an insurance company becomes insolvent, but workers’ compensation benefits are driven by statute. Because these benefits are set by law and are owed to the injured worker regardless of the insurer’s status, the guaranty association pays the full amount due for a valid workers’ compensation claim. In other words, the association covers the entire benefit amount that the claimant is entitled to under workers’ compensation, not a capped portion.

The key idea is that guaranty associations step in to ensure payment of claims when an insurance company becomes insolvent, but workers’ compensation benefits are driven by statute. Because these benefits are set by law and are owed to the injured worker regardless of the insurer’s status, the guaranty association pays the full amount due for a valid workers’ compensation claim. In other words, the association covers the entire benefit amount that the claimant is entitled to under workers’ compensation, not a capped portion.