The United States Court of Appeals for the Fourth Circuit recently held that amounts due with respect to workers' compensation insurance are entitled to priority under the United States Bankruptcy Code. In re Howard Delivery Service, Inc. (Howard Delivery Service Inc. v. Zurich American Insurance Company), the court found that the code provides fourth-level priority for unsecured claims for “contributions to an employee benefit plan arising from services rendered within 180 days before the date of the filing of the petition.”
The decision, while addressing only claims relating to workers' compensation insurance, helps to strengthen insurers' claims to priority for amounts due for health, life, and disability insurance, according to the Bankruptcy Group of Lord Bissell & Brook, which represented the insurer.
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