Adjuster License 8

While inspecting a recently insured building, an insurance company representative notices a loose handrail on a stairway. When writing to the agent the company official would refer to this situation as which of the following? A. A hazard B. A risk C. A liability D. An occurence

A. A hazard

Which of the following circumstances would NOT be an injury considered to "arise out of and in the course of" the employment? A. An employee was injured during a lunch break in the factory parking lot. B. A work-related accident occurred when the risk of injury was well known to the employee. C. An injury to an employee was caused by the carelessness of another worker. D. A workplace injury was caused by an employee's own negligence.

A. An employee was injured during a lunch break in the factory parking lot. Workers Compensation laws are designed to cover employees regardless of the hazards of the occupation, the training provided (or not) or who is at fault.

When an insurer takes no action upon realizing material changes in a contract, this is called: A. An implied waiver B. A misrepresentation C. A warranty D. A guarantee

A. An implied waiver

Which of the following best describes the fundamental trade-off of Workers' Compensation insurance? A. Employees are provided no-fault benefits for most work-related injures in exchange for the loss of the right to sue the employer for damages. B. As long as employers provider workers compensation insurance, they are exempt from OSHA regulations. C. Employees who waive their rights under workers compensation laws also lose their rights to bring civil lawsuits against their employers. D. In exchange for providing workers compensation & health insurance for all employees, employers become immune from any civil liability.

A. Employees are provided no-fault benefits for most work-related injures in exchange for the loss of the right to sue the employer for damages.

Mike's Moonshine, Inc. is located in a state that permits Mike to decide whether he would like to provide W/C coverage to his employees or not. Mike lives in a: A. Pro-choice state B. Elective state C. Obligatory state D. Compulsory state

B. Elective state If a state allows an employer to choose not to provide W/C coverage for its employees, it is known as an "elective state".

Rusty is opening a business in his state of residence and he will hire a staff of 25 employees. He is preparing to purchase workers' compensation insurance and finds that his state is "elective". All of the following statements describe an "elective" state law, EXCEPT: A. In elective states, employer's can choose whether to purchase workers' compensation coverage . B. Employers' in elective states can still be sued by the injured employees, even if they choose to provide workers' compensation coverage. C. Employer's in elective states, who choose to provide workers' compensation coverage cannot be sued by their injured employees. D. In elective states, an employer who chooses not to provide workers' compensation coverage, loses the immunity from being sued by their injured employees.

B. Employers' in elective states can still be sued by the injured employees, even if they choose to provide workers' compensation coverage.

"Experience rating" provides employers with the incentive to: A. Hire only experienced workers. B. Prioritize safety & control hazards in the workplace C. Hire fewer workers. D. Purchase private workers' compensation coverage.

B. Prioritize safety & control hazards in the workplace

Which type of damages is not intended to indemnify the plaintiff? A. Special damages B. Punitive damages C. General damages D. Compensatory damages

B. Punitive damages Punitive damages are awarded in cases of gross negligence for the purpose of punishing the defendant. Special & general damages are types of compensatory damages, which are intended to indemnify the plaintiff.

What type of liability is imposed by law without regard to fault on those participating in certain activities or owning certain things that are considered especially hazardous? A. Vicarious/Imputed B. Strict/Absolute C. Malfeasance D. Negligent Tort

B. Strict/Absolute Absolute or strict liability is liability w/o fault. It is occasionally imposed by statute on those participating in specified activities that are considered especially hazardous.

Which of the following statements is correct concerning the premiums for a workers' compensation policy? A. The premium shown on the information page is the final premium. B. The insurer has three years after policy expiration to audit the insured's payroll records in order to determine the final premium. C. The insurer has twelve months from policy expiration to determine actual payroll & work classifications & bill the insured accordingly. D. The insured has the option of having its payroll audited & a premium adjustment made.

B. The insurer has three years after policy expiration to audit the insured's payroll records in order to determine the final premium.

Since the parties to an insurance policy rely on the honesty of the other, an insurance contract is considered to be based on: A. Aleatory principles B. Utmost good faith C. Unilateral contacts D. Personal aspects

B. Utmost good faith

Which of the following alleged cases of negligence is more likely to be valid? A. Vicki sued Donna because Donna playfully threatened her with a toy gun. B. The side of a hill washed from Jake's property onto Vera's driveway, blocking the entrance to her garage, Jake is sued for damages. C. A large oak tree in Wilbur's yard was struck by lightning. A limb was severed and remained suspended across tow other limbs. Three months later, it fell & hit a neighbor's car. Wilber was sued for negligence. D. A farmer was plowing his field when he looked up & saw the care of his neighbor, Marie, collide with a truck. While he was distracted by the accident, he injured his foot in the plow. Marie was for negligence causing the farmer's injury.

C. A large oak tree in Wilbur's yard was struck by lightning. A limb was severed and remained suspended across tow other limbs. Three months later, it fell & hit a neighbor's car. Wilber was sued for negligence. Wilbur was most likely aware of the damage to the tree, but waited too long to remove the limb and is most likely negligent.

Employers are responsible to make payments to the injured worker, in excess of the benefits regularly provided by workers' compensation law for all of the following, EXCEPT: A. Knowingly employing an illegal worker. B. Failing to comply with a health or safety law or regulation. C. If the employer contributed to the injury in any way. D. Discharging or discriminating against any employee in violation of workers' compensation law.

C. If the employer contributed to the injury in any way. The employer is only required to make payments in excess of the no-fault benefits workers' compensation coverage provides if they have committed serious and willful misconduct. Therefore, the answer choice that would NOT be correct is "If the employer contributed to the injury in any way.

it has been reported to the Insurance Department in a given state that Callie, a licensee in that state, has violated an insurance law. The Insurance Commissioner will hold a hearing to determine the nature of Callie's behavior. After the hearing, the Commissioner is convinced that Callie has engaged in behavior that violates insurance law. Which of the following is the next step the Commissioner will take? A. Imposing a fine on Callie according to the insurance laws of the state. B. Revoking or suspending Callie's license C. Issuing a cease and desist order. D. Referring Callie's case to the state attorney general for prosecution.

C. Issuing a cease and desist order.

Damages awarded to a plaintiff in a tort action that are in excess of the cash value of the economic loss, as a punishment to the defendant and as a deterrent from similar conduct by others, is known as: A. Compensatory damages B. General damages C. Punitive damages D. Special damages

C. Punitive damages Punitive damages are an award made by a judge that is intended to punish the the negligent party. "Punitive damages" are also referred to as "exemplary damages".

Which of the following is the PRIMARY source of information used by insurance companies during the underwriting process? A. Credit reports B. Insurance industry statistics & reports C. The application for insurance D. Consumer reports

C. The application for insurance

The first goal of the rehabilitation services under Louisiana Workers' Compensation coverage is: A. To return the worker to a modified position B. To provide on-the-job training to the worker for a new position . C. To return the worker to the same position D. To provide a short-term (less than six weeks) retraining program.

C. To return the worker to the same position The rehabilitation program under Louisiana Workers' Compensation lists its goals, in the order in which they wish to rehabilitate the injured worker. The first goal listed is a rehabilitate the worker to return to his or her same position.

The maximum amount a liability policy will pay for all occurrences taking place during the policy period, is known as: A. The limit of liability B. The single limit C. Split limits D. The aggregate limit

D. The aggregate limit The aggregate limit is the maximum amount the policy will pay for all occurrences that take place during the policy period. When the aggregate limit is reached, the insured no longer has coverage under the policy.