Assignment 9 - Workers Compensation Underwriting Considerations

Which one of the following statements is correct with respect to underwriting workers compensation insurance? Select one: A. From an underwriting standpoint, housekeeping refers to cleanliness and operating efficiency. B. An insured's providing healthcare benefits is not related to its workers compensation exposure. C. All firms in the same industry generally have the same hazards and level of risk. D. On-premises hazards relating to housekeeping and maintenance are rare.

A. From an underwriting standpoint, housekeeping refers to cleanliness and operating efficiency.

Which one of the following controls the coverage provided by a workers compensation policy? Select one: A. The state compensation laws B. The policy provisions C. Professional employer organizations (PEOs) D. The Occupational Safety and Health Administration (OSHA)

A. The state compensation laws

Which one of the following statements is correct with respect to workers compensation underwriting? Select one: A. Seasonal employees tend to be better trained and more attentive to work safety than full-time employees. B. The off-premises hazard has three elements: the duration of travel, the mode of transportation, and the hazards at remote job sites. C. Employee morale is generally not a factor considered when underwriting workers compensation insurance. D. The standard workers compensation policy for a contractor specifically excludes coverage for employees of any uninsured subcontractors.

B. The off-premises hazard has three elements: the duration of travel, the mode of transportation, and the hazards at remote job sites.

Taunton General Contractor (TGC) is covered by a workers compensation insurance policy. As the general contractor for a construction project, TGC hires Cintriell Plumbing (CP) as a subcontractor. Which statement about this relationship is true? Select one: A. Under most states' workers compensation statutes, TGC will not be held responsible for workers compensation benefits to employees of CP. B. Unless CP has workers compensation insurance, TGC's workers compensation premium should include a charge for CP's employees because TGC's policy will automatically provide coverage for them. C. Because subcontractors are ineligible for coverage under the general contractor's workers compensation policy, TGC must purchase separate workers compensation insurance to cover CP's employees. D. TGC must request an endorsement to its workers compensation policy to provide workers compensation coverage to CP's employees.

B. Unless CP has workers compensation insurance, TGC's workers compensation premium should include a charge for CP's employees because TGC's policy will automatically provide coverage for them.

All of the following factors are considered when underwriting workers compensation insurance, EXCEPT: Select one: A. Cumulative trauma disorders B. Subcontractors C. Employee gender and marital status D. Management attitude and capability

C. Employee gender and marital status

An underwriter is comparing workers compensation submissions on two accounting firms, Firm A and Firm B. Each firm employs roughly 350 employees. Firm A occupies two floors in a prominent high rise building in a major metropolitan area. Employees are not required to travel. Firm B, located in the same metropolitan area, has multiple offices spread throughout the city to facilitate client visits. Housekeeping and maintenance hazards are similar among the firms. Firm A poses a greater single loss exposure due to Select one: A. The special hazards associated with the accounting firm classification. B. Higher employee turnover rates for single location firms. C. The fact that loss experience is typically higher for single location firms. D. The potential for many injuries or deaths resulting from a single incident.

D. The potential for many injuries or deaths resulting from a single incident.