Workers Compensation Insurance
Workers compensation rating is developed by applying a rating bureau job classification rate to each
$100 of payroll
A premium discount is the term that describes when an insured owes a total standard premium greater than
$5,000
Which of the following statements is true regarding the premium computation for workers compensation Insurance?
A premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis. Because the initial premium calculation is based on estimated payrolls, a premium auditor may inspect actual payrolls paid ti endure that adequate premiums are being paid.
What is a second injury fund ?
A workers compensation program designed to pay for any additional benefits when an employee with a previous injury suffers a second injury
An employer that qualifies for a self-insured workers compensation plan may wish to further limit his liability against catastrophic losses by purchasing excess insurance coverage called
Aggregate excess coverage Aggregate excess coverage covers liabilities above the employers "retention requirement" up to a predetermined loss limit.
Workers compensation statutes provide coverage for diseases that occur as a result of workin in the employer's working environment. Which of the following is an example of a disease that would NOT be covered by such provisions? a) An employee of a medical facility who suffers from a common cold. b) An employee of a chemical plant who suffers from cancerous tumors. c) An employee of municipal fire department who suffers from smoke inhalation. d) An employee of a data-processing company who suffers from carpel tunnel syndrome.
An employee of a medical facility who suffers from a common cold Although a cold could have been caught as a result of the working environment, it is not specific enough to that environment for it be considered casual.
Employers liability insurance, Part Two of a standard workers compensation and employers liability (WC&EL) policy form, excludes a) An intentional act that is caused by the insured b) Liability to a third party for claims arising out of injury to an employee c) Bodily injury caused by accident when the injury occurs during the policy period d) Bodily injury caused by or aggravated by disease during the policy period
An intentional act that is caused by the insured The employer is not liable for damages caused by intentional acts (negligence) of the insured.
According to the conditions of a workers compensation policy, the insurer has the right to inspect the insured workplace
At any time.
An employee is injured while visiting the employer's out-of-state site. How will the workers compensation benefits be determined?
Benefits will be provided if the state was listed on the policy information page. Employers must list all states in which they do businesses on the policy information page for coverage to apply in those states.
Workers compensation laws provide all of the following types of benefits EXCEPT a) Rehabilitation benefits b) Death benefits c) Compensatory benefits d) Medical benefits
Compensatory benefits Awards for pain and suffering are not compensated under workers compensation.
States with monopolistic state workers compensation funds
Do not allow private insurers to be licensed to write workers compensation coverage. Under the monopolistic state fund program, no private insurer is allowed to market competitive programs in the state. In such states, workers compensation is available to all employers, but employers liability coverage may or may not be offered.
What is the purpose of employers liability insurance ?
Employers liability insurance protects the insured from situations that are not covered under a state's workers compensation law .
What method of premium computation relates an employer's losses, payroll, and premiums to the rating bureau's classifications of operations?
Experience modification factor An experience modification factor is developed by a rating bureau. The calculations relate an employer's losses, payroll, and premiums, serrated according to classifications of operations, all as reported to the bureau by the employer's insurance company.
If the premium charged for a particular insured is increased or decreased for a future period based on that insured's loss experience for a period in the recent past, the policy uses a(n)
Experience rating plan An experience rating plan adjusts the premiums charges based on the claims history, positive or negative, of the individual insured.
The voluntary compensation endorsement provides statutory coverage for which types of employees?
Farmworkers This endorsement (voluntary compensation endorsement) added to a workers compensation policy provides statutory coverage for employees who do not fall under a state's workers compensation act, such as farmworkers.
Which federal act provides benefits to injured civilians who are employed by the federal government?
Federal Employees Compensation Act The Federal Employees Compensation Act provides benefits to injured civilians who are employed by the federal government; no private insurers are involved.
What is the difference between a monopolistic state fund and a competitive market ?
In monopolistic state funds , employers are required to purchase workers compensation insurance from a state - operated entity . In a competitive market , workers compensation is purchased by employers from insurers authorized to write casualty insurance .
What does the term " exclusive remedy " mean ?
Injured employees cannot seek damages outside workers compensation .
If an employer in a state with elective workers compensation laws chooses not to be subject to those laws, what does the employer lose?
Its common law defenses against liability suits Elective law means the employer does not have to be subject to the state's workers compensation laws, but if the employer chooses not to be subject to the laws, it losses it common law defenses against liability suits.
Crews of Ships are covered by the
Jones Act The Jones Act is a federal law that provides remedies to seamen who are injured while working on a vessel. It extends the provisions of the Federal Employers Liability Act (FELA).
Which of the following is NOT a duty of the employer/insured if an injury occurs at the workplace? a) provide immediate medical care required by the law b) Notify the insurer at once c) Provide the name and address of the injured worker and any witnesses to the injury d) Make voluntary payments for treatment of the workers injury
Make voluntary payments for treatment of the workers injury The insured's duties are to notify the insurer at once, provide immediate medical care required by law, provide the names and address of the injured worker and any witnesses, promptly send any notices or other legal papers, cooperate with the insurer, and to not make any voluntary payments or assume any obligations.
What are the 4 types of benefits provided by Workers Compensation insurance ?
Medical payments , disability income , rehabilitation expenses , and death benefits
A plant worker for a chemicals manufacturer was recently diagnosed with a rare blood disease. She told her doctor that her job required her to handle industrial waste chemicals. Which of the following types of injuries is covered under the workers compensation policy?
Occupational disease caused or aggravated by a condition of employment Occupational disease, like bodily injury, that arrises out of or during employment is covered under workers compensation insurance.
Workers compensation benefits are provided for an employee injury or death that arises out of the course of normal employment in all of the following situations EXCEPT a) An employee working as an over-the-road truck driver suffers while loading freight at a vendor's dock. b) On his evening stroll, an employee of an advertising company is injured while watching a competitor's billboard sign being removed from an advertising site. c) An employee who delivers overnight packages is injured while voluntarily running the "package race" at the mandatory company picnic. d) An employee suffers an injury while working at a job site.
On his evening stroll, an employee of an advertising company is injured while watching a competitor's billboard sign being removed from an Workers compensation provides coverage for injuries that occur in the course of normal employment, activities that add to the employer's goodwill and interests, and activities that an employee normally would engage in during the course of employment. The employer is liable for compensation for injuries that occur during employer-sponsored off-duty activities.
What are the 2 main parts of workers compensation insurance ?
Part I is workers compensation , and Part II is employers liability .
All of the following are factors in rating workers compensation insurance EXCEPT a) Payroll b) Loss experience c) Job classification d) Sales
Sales The hazard of the work, the amount of payroll, and the employer's prior loss experience are all rating factors.
Workers compensation statutes require employers to meet capital reserves requirements sufficient to pay any claims that might arise. Employers can meet such obligations through all of the following EXCEPT a) Assigned risk plans b) Competitive state funds c) Second injury funds programs d) Self-insurance plans
Second injury funds programs. Second injury funds are a method by which employers manage the risks associated with the hiring of previously potential employees.
In order to be covered by the U.S. Longshore and Harbor Workers Compensation Act, a worker must meet the requirements of the
Situs and status test A worker is covered under the U.S. Longshore and Harbor Workers Compensation Act (LHWCA) only if he or she meets a situs and a status test. The injury must occur on the navigable waters or on an adjoining wharf, pier, dock, or similar facility used in the loading, unloading, building, or repairing of vessels. In addition, the individual must have been engaged in maritime employment when injured.
Which of the following is exempt from Workers Compensation laws? a) Part-time employees b) Employees that are family members and minors c) Sole proprietors d) Corporate officers
Sole proprietors Sole proprietors, partners, and members of limited liability companies are exempt from the Workers Compensation statutes and coverage but may opt-in by specifically requesting coverage on themselves by endorsement on the policy.
Which workers compensation conditions states that the first named insured will act on behalf of all insureds under the policy?
Sole representative
Under the workers compensation system, who is responsible for the expenses resulting from work-related injuries and occupational diseases?
The employer, regardless of whether it was at fault for the injury or disease.
According to the standard workers compensation and employer liability policy form, a state should be listed in Part Three - other states' insurance of the workers compensation and employers liability policy when
The insured expects to extend operations to that state. By naming a state in Part Three of a workers compensation and employers liability (WC&EL) policy, an employer provides that company operations may be conducted in that state.
The voluntary compensation endorsement in a workers compensation policy provides that the insurer will pay statutory benefits to the insured person in exchange for what?
The insured person must release the employer and the insurer from further liability. This endorsement provides that the insurer will pay statutory benefits to the insured person in exchange for the injured working releasing the employer and the insurer from further liability. Statutory or mandatory benefits are benefits that employers are required by law to provide to their employees. Examples include worker's compensation insurance, unemployment insurance and, under some state and local laws, paid sick leave.
Which of the following is INCORRECT in regard to the conditions found in workers compensation policy? a) The first named insured will act on behalf of all insureds under the policy. b) The insurer may inspect the workplace after giving the insured 5 days notice. c) If the policy period is longer than 1 year and 16 days, all policy provisions will apply as though a new policy was issued on each annual anniversary date. d) The insured's right and duties may not be transferred to anyone else without the insurer's written consent.
The insurer may inspect the workplace after giving the insured 5 days notice. The insurer has the right to inspect the workplace at any time without giving notice.
What is the primary purpose of Workers Compensation insurance ?
To pay benefits to employees for injuries arising out of employment
Which of the following IS considered a work-related injury/occupational disease under Workers Compensation law?
Tom works as a painter in an auto body shop. The chemicals from the paint aggravate Tom's asthma to the point that he must be hospitalized for several days. Occupational disease must be caused or a aggravated by a condition of the employment. The following types of injuries are generally excluded from coverage: injuries that occur traveling to and from work; injuries that result from intoxication of the employee; injuries willfully caused by the employee; injuries that result from a willful failure to follow safety precautions; injuries that occur from activities not a part of the job.
Shipbuilders and repairers are covered by the
U.S. Longshore and Harbor Workers Compensation Act. The U.S. Longshore and Harbor Workers Compensation Act is a federal law offering workers compensation benefits for works who are incurred on navigable water who are normally not covered by state workers compensation laws.