Definition of Uninsured Employers Fund
The uninsured employers fund is a fund that many states have established in order that an employee who suffers a work-related injury or illness will still be able to receive workers' compensation benefits even though their employer does not have workers' compensation coverage. In every state except Texas, most employers with few exceptions are required by law to either carry workers compensation insurance or be self-insured. However, just as there are drivers who drive without the required car insurance coverage, there are also employers who illegally do not have workers' compensation coverage, or they have allowed their workers' compensation coverage to lapse. In this event, a worker who sustains a work-related injury or illness can still file a workers' compensation claim and be compensated through the uninsured employers fund in their state.
The laws and procedures in regard to applying for and receiving workers' compensation benefits from the uninsured employers fund vary from state to state, but the primary purpose of the fund is the same in every state that has one. It is there so that an injured worker whose employer does not have workers' compensation coverage can get workers' compensation for a work-related injury or illness.