RBS News

Written By: RBS Law | 2016-04-06

Workers’ Compensation Exposure: Asset-Only Purchase

I will be doing an asset-only purchase of an existing business.  What is my workers’ compensation exposure?


At the Bureau of Workers’ Comp level, an asset-only purchase agreement means essentially nothing.  With the exception of a few very specific circumstances, the BWC’s position is if another person/entity is purchasing an existing business, the purchaser will inherit the experience of the former business.  This could be good or bad.  If the company has a bad experience modifier due to claim losses, your premium costs may be higher than you would normally anticipate.  Also, if the prior business has any outstanding liabilities (premium payments, penalties, etc), the purchaser would assume the responsibility for those liabilities as well.


It is always best to do your homework when purchasing an existing business.  More often than not, this due diligence process has provided the justification to either abandon the purchase entirely or substantially modify the purchase terms.  If a business purchase is being considered, contact our office and we can perform the necessary research so there are no surprises down the road.  

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