Q. Can I get a personal injury settlement if the company I am suing is out of business or goes bankrupt?
A. Yes, as long as there was an insurance policy on the date of your accident.
You were hurt in an accident and were seriously injured. You were lucky because your injury was caused by a company with a lot of insurance.
But suddenly, the defendant company is out of business. Is this a problem? Will your personal injury settlement be affected if the company you are suing is out of business?
Yes, you can still get money from the company’s insurance policy. It is only important that the insurance policy was in force on the date of your accident.
If the company went out of business later, it doesn’t matter, even if the insurance premium is no longer being paid.
If the Company Goes Out of Business, Things Just Got Better for You!
When a company is out of business, it is likely that the owner, managers, supervisors, and employees of the company no longer care about your lawsuit.
The employees and supervisors who may have been negligent and responsible for causing your injury, will also probably not care and will either tell the truth, refuse to testify, or disappear and be unavailable to testify.
See below why you have an advantage when the company you’re suing is out of business.
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Why Is It an Advantage if the Company You’re Suing Is Out of Business?
When the employee responsible for causing the accident doesn’t testify, there is no one to contradict your testimony about how the accident happened.
If the employee responsible for causing your accident doesn’t testify, you will likely be entitled to summary judgment on liability.
Summary judgment on liability is a court ruling that the defendant is 100% responsible for causing your injury, which entitles you to 9% interest on your personal injury settlement.
So, if the company you are suing is out of business, that’s probably good news for you, not bad news.
When Is It Bad That the Company I Am Suing Is Out of Business?
If your injury is worth a lot more money for a personal injury settlement than the amount of insurance, the business or company had, you may have to settle for the entire amount of the company’s insurance policy.
The property owner may also be liable for your injury, and the property owner will have insurance. Additionally, the property is a valuable asset that can be used to satisfy your injury claim if the property owner is liable for your injury.
Example When It Is Bad if the Company You Are Suing Is Out of Business
If you’re suing a business or company for a very serious injury like a leg amputation that can be worth many millions of dollars and the company’s insurance policy was only $1 million dollars, you may not be able to obtain more money from the company’s assets that may no longer exist.
What if I Was Injured and the Company Was Out of Business Before I Was Injured?
This is an unusual type of accident, but if you were injured on a property where a company was no longer in business at the time of your accident, there may or may not be liability insurance for that business.
However, the property owner will be liable for your injury, and the property owner will have insurance. Additionally, the property is a valuable asset that can be used to satisfy your injury claim.
What Happened When Our Client Was Injured, and the Company Went Out of Business
We represented a woman who injured her neck when she was knocked down by a forklift in a warehouse store.
After the accident, the store went out of business. The forklift operator was gone and, having no reason to cooperate, never testified at a deposition.
We won summary judgment on liability which entitled our client to 9% interest. The insurance company offered $750,000 and two months later settled for its entire $1 million policy.
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Watch Founding Partner Phil Franckel, Esq. talk about New York Serious Injury Attorneys.com, difficult cases, and the 1-800-HURT-911® Dream Team™
Philip L. Franckel, Esq. is one of the HURT911® Dream Team™ Founding Partners at 1-800-HURT-911® New York; He has a 10 Avvo rating; Avvo Client’s Choice with all 5-star reviews; Avvo Top Contributor; and a former Member of the Board of Directors of the New York State Trial Lawyers Association.
Robert Plevy, Esq. is one of the HURT911® Dream Team™ Founding Partners at 1-800-HURT-911® New York. Rob began his legal career in 1993 as an Assistant Corporation Counsel defending The City of New York against personal injury lawsuits.