WSIB Claims and a Business Sale in Ontario: What Buyers Should Check

Workplace injuries don’t stop mattering just because a business changes hands. WSIB claims in a business sale can affect a buyer in two separate ways — a specific injured worker’s open claim, and the seller’s broader claims history, which can influence the premiums the business pays going forward. Both deserve a place on the due diligence checklist, not an afterthought once the deal is already signed.

This article looks at why WSIB exposure isn’t purely the seller’s problem, what buyers should be checking before closing, and where to get a definitive answer rather than guessing.

Why This Isn’t Just the Seller’s Problem

Ontario’s workplace safety and insurance system is designed to follow the business, not just the individual employer at a single point in time. Depending on how a transaction is structured, a buyer that continues operating the same business as a going concern can find itself dealing with the consequences of claims and a claims history that predate the purchase — even though the injury happened, and the premiums were paid, entirely under the seller’s ownership.

Two Kinds of Exposure to Separate

Open claims are specific, identifiable injury claims still active at the time of the sale — an employee currently receiving benefits, or a claim still being adjudicated. These have a direct cost tied to a named individual.

Claims-cost history is different: it’s the seller’s overall claims history over time, which the WSIB factors directly into the premium rate the business pays under its current rate-setting model (WSIB’s older "experience rating" programs, NEER and CAD-7, concluded in 2020). A poor claims history can mean higher ongoing premiums regardless of whether any specific claim is still open.

The "Successor" Question

Whether — and how — a seller’s claims history and experience rating follow the business into new ownership depends on the specific facts of the transaction, including whether it’s structured as a share sale or an asset sale and whether the business continues operating as substantially the same enterprise. This is genuinely a "confirm before closing" question rather than something to assume either way; the WSIB itself is the authoritative source on how a specific transaction will be treated, and it’s worth raising directly rather than relying on general assumptions.

A WSIB Due Diligence Checklist

• [ ] Request the seller’s current WSIB account status and standing
• [ ] Ask for a list of any open or recent workplace injury claims
• [ ] Review the seller’s claims history and experience-rating trend over recent years
• [ ] Confirm whether any claim involves an employee the buyer plans to hire
• [ ] Ask the seller directly whether premiums are current and in good standing
• [ ] Contact the WSIB (or have counsel do so) to confirm how it will treat the specific transaction structure

Getting Confirmation Before Closing

Buyers can request confirmation of a business’s WSIB account standing before completing a purchase, similar in spirit to how a buyer might confirm other outstanding government obligations before closing. Because the exact process, required forms, and current fees are the kind of administrative detail that changes over time, confirm the current procedure directly with the WSIB rather than relying on a general description — and build enough time into the closing schedule to get an answer back before funds change hands.

Share Sale vs. Asset Sale Considerations

In a share sale, the buyer takes over the same corporate employer, including its existing WSIB account and history, by definition — there’s no separate question of whether the account "transfers." In an asset sale, the business itself may be treated as continuing for WSIB purposes even though the legal employer changes, which is precisely why the successor question above needs a direct answer rather than an assumption based on which structure was chosen.

Frequently asked questions