Ch. 14 Workers' Compensation Insurance - Random Questions 1 - MI P&C Licensing

Under which section of the Workers' Compensation and Employers Liability policy would the insured's duties be found? A. Section I B. Section IV C. Section II D. Section III

B. Section IV The insured's duties if injury occurs are listed in Section IV, and include the following: Provide for immediate medical services required by law; Give the insurer the names and addresses of the injured persons and any witnesses; Promptly forward all notices, demands, and legal papers related to the injury to the insurer; Cooperate with the insurer's investigation; Do not interfere with the insurer's subrogation rights; and Do not voluntarily make any payments, assume obligations, or incur expenses. 14.8

The Workers' Compensation policy's guidelines for providing other state coverage do not include which requirement? A. If the insured begins work in a covered state after the effective date of the policy the other in force insurance, if any, applies B. The insurer must reimburse the insured for any payments the insurer is not allowed to pay C. Monopolistic states may be listed on the information page D. The insured must notify the insurer within 30 days when entering a state not listed on the policy

C. Monopolistic states may be listed on the information page Employers with operations in the monopolistic states must purchase coverage directly from the state entity that sells this coverage. 14.8

Which of the following Workers' Compensation benefits do not have a monetary limit? A. Scheduled injuries B. Disability benefits C. Death and survivor benefits D. Medical benefits

D. Medical benefits Medical benefits are unlimited in most states. Other items have either dollar or percentage limits. 14.4

Which statement is true regarding the Workers' Compensation Assigned Risk Plan? A. Any employer who is unable to purchase coverage in the voluntary market can obtain coverage in the Assigned Risk Plan B. It is reserved for those employers who have better-than-average loss experience C. It is used exclusively for Voluntary Workers' Compensation Insurance D. It provides more limited benefits than those provided by the voluntary insurance programs

A. Any employer who is unable to purchase coverage in the voluntary market can obtain coverage in the Assigned Risk Plan The Workers' Compensation Assigned Risk Plan is available to those employers who cannot obtain coverage in the voluntary market because of their loss experience or the hazardous nature of their employment. 14.10

Which statement is false regarding Workers' Compensation? A. Employees may elect not to be covered at policy inception or renewal B. A covered injury must occur while the employee is at work or working C. A covered injury must be reasonably related to employment D. Some types of work are not covered

A. Employees may elect not to be covered at policy inception or renewal Workers' Compensation is the sole remedy for work related injuries. An employee cannot elect not to be covered. 14.1

Which of the following is true about the Assigned Risk Plan? A. It is intended for employers who are unable to purchase in the voluntary market B. Private insurers compete with the Assigned Risk Plan C. It is intended for employers who have high claims volume D. Insurers with income over $10 million can opt out of participating in the Plan

A. It is intended for employers who are unable to purchase in the voluntary market Typically, insurers who write Workers' Compensation Insurance in the voluntary market in the state must participate in the Assigned Risk Plan. 14.10

Private Insurers are not allowed to write Workers' Compensation Insurance in which of the following states? A. Monopolistic B. Competitive C. Compulsory D. Voluntary

A. Monopolistic Monopolistic States are states that provide Workers' Compensation benefits only through a state fund. These states do not allow private insurers to compete with the state fund. 14.1

Which type of regulatory environment permits Workers' Compensation benefits only through a state fund? A. Monopolistic B. Competitive C. Elective D. Compulsory

A. Monopolistic Monopolistic Workers' Compensation insurance is only available through a state fund. 14.1

Workers' Compensation provides coverage for all of the following, except: A. Pain and suffering B. Disability income C. Medical expenses D. Death

A. Pain and suffering Pain and suffering are not covered under Workers' Compensation. 14.4

Employees exempted from Workers' Compensation laws include all of the following, except: A. Part-time employees B. Independent contractors C. Farm laborers D. Casual workers

A. Part-time employees Part-time status is not an exemption from coverage under Workers' Compensation laws. 14.2

Which of the following workers would be eligible for Workers' Compensation? A. Part-time worker B. Casual laborer C. Domestic employees D. Farm laborer

A. Part-time worker Agricultural or farm workers, domestic employees, and casual laborers are common exclusions to eligibility. Part-time workers under an eligible plan must be covered. 14.2

An injury would not be covered by Workers' Compensation under which of the following circumstances? A. The injury occurs on the way to work B. The injury occurs while a worker is performing his work duties C. A worker is injured during assigned hours D. The risk causing the injury is employment-related

A. The injury occurs on the way to work The injury must occur while the employee is at work or working. 14.2

Which statement is the primary objective of Workers' Compensation? A. To provide a payment of benefits to employees for injuries that arise out of their employment B. To provide accident coverage for employees both on and off the job C. To improve employer and employee relations D. To improve the employee's working conditions

A. To provide a payment of benefits to employees for injuries that arise out of their employment Workers' Compensation provides benefits to workers injured on the job without regard to fault. 14.5

Employers Liability Insurance is designed to do all of the following, except: A. Cover claims that are not subject to compensation laws B. Extend policy benefits to states not listed on the Declarations page C. Fill in gaps of compensation coverage D. Protect the employer against common law claims

B. Extend policy benefits to states not listed on the Declarations page Part II does not extend the coverage to other states. Other States Insurance is provided by Part II of the policy. 14.7

Temporary Total Disability may be described as: A. Allowing no possible improvement B. Inability to return to any employment while recovering C. Any disability that extends beyond 60 days D. Preventing return to the employee's former occupation

B. Inability to return to any employment while recovering Temporary Total Disability indicates the inability to return to any employment while recovering. 14.4

Which of the following is true of Employers Liability insurance? A. It covers only executive officers B. It covers actions brought against the insured in a capacity other than as an employer C. It is excess coverage over Workers' Compensation benefits D. It covers employees only if working in a state not listed on the information page

B. It covers actions brought against the insured in a capacity other than as an employer Employers Liability covers actions brought against the insured in a capacity other than as an employer, such as consequential injury. 14.5

Which statement is true regarding the Employers Liability Insurance Part of Workers' Compensation? A. It is optional coverage not needed by most employers B. It provides coverage for employment-related liability outside of Workers' Compensation statute C. It includes employees as additional insureds D. It provides coverage for a worker injured in a state that is not listed on the Declarations

B. It provides coverage for employment-related liability outside of Workers' Compensation statute Employers Liability covers suits for injuries and their consequences that are not covered by Workers' Compensation. 14.5

An insurer will not pay which of the following in the event of a Workers' Compensation claim? A. Premiums for appeal bonds B. Loss of insured's earnings because the insurer requested the insured come to court C. Defense costs D. Claim expenses

B. Loss of insured's earnings because the insurer requested the insured come to court The Insurer will pay expenses incurred by the insured, at the request of the insurer, but not loss of earnings. 14.6

Physical therapy and vocational training are two examples of what kind of benefits? A. Disability benefits B. Rehabilitation benefits C. Death and survivor benefits D. Medical benefits

B. Rehabilitation benefits Physical therapy and vocational training are utilized with the objective of returning the injured employee to work as soon as possible. 14.4

Which coverage is not included in a Workers' Compensation policy? A. Medical benefits B. Second injury fund C. Employer's liability D. Disability income benefits

B. Second injury fund The Second Injury Fund pays that portion of the loss attributed to the prior disabling injury. The purpose of the fund is to relieve an employer of the portion of claims related to prior injuries that are simply made worse by the employee's current work. This is part of the policy but something provided on a state-by-state basis. 14.4

Which statement is false regarding Workers' Compensation? A. It pays medical expenses, loss of time benefits and death benefits B. The premium is paid by the employee C. It covers investigation and defense costs D. Payment is made without regard to negligence

B. The premium is paid by the employee The cost of the Workers' Compensation program is paid by the employer. 14.1

Which of the following must participate in the Workers' Compensation Assigned Risk Plan? A. All insurers authorized to do business in the state B. All domestic insurers in the state C. Insurers that are authorized to write Workers' Compensation in the voluntary market D. Insurers that write Workers' Compensation insurance exclusively

C. Insurers that are authorized to write Workers' Compensation in the voluntary market Because the Workers' Compensation Assigned Risk Plan provides coverage for those employers unable to obtain voluntary coverage due to their prior loss experience or the hazardous nature of their operations, all companies that write Workers' Compensation coverage in the voluntary market are required to participate. Risks are apportioned among insurers in relation to market share. 14.1

Which is not included in the general section of the Workers' Compensation policy? A. Work locations B. State C. Other insurance D. State Workers' Compensation law

C. Other insurance The General Section also includes the name of the insured and establishes that the policy is a contract between the employer and the insurer. 14.5

A disability that prevents an employee from continuing the job he/she held when injured, but not from doing any work at all, and from which the employee is not expected to recover is known as a: A. Temporary partial disability B. Temporary total disability C. Permanent partial disability D. Permanent total disability

C. Permanent partial disability A temporary partial disability arises out of an injury which renders an employee able to do some work, but unable to earn his/her usual wage until full recovery. 14.4

Which of the following Federal Workers' Compensation Laws applies to ship workers that load, unload, build and repair ships? A. The Jones Act B. The Federal Employers Liability Act C. The U.S. Longshoremen and Harbor Workers' Compensation Act D. The U.S. Contributory Liability Act

C. The U.S. Longshoremen and Harbor Workers' Compensation Act The only coverage available for workers who load, unload, build and repair ships is the U.S. Longshoremen and Harbor Workers' Compensation Act. 14.3

All of the following are true about temporary partial disability benefits, except: A. Benefits are calculated as a percentage of the difference in the wages B. The employee is able to do some work C. The employee will never return to his/her original wage level D. The employee's wages during the period of disability are less than before the injury

C. The employee will never return to his/her original wage level After a temporary partial disability, it is expected that the employee will return to the same job after recovery. 14.4

All of the following statements regarding the Voluntary Compensation endorsement is correct, except: A. The state of employment must be provided B. The class of employees to be covered must be provided C. The employees must waive their right to sue and accept coverage under the endorsement D. It exempts employers from state Workers' Compensation law.

D. It exempts employers from state Workers' Compensation law. This endorsement is used when an employer wishes to provide Workers' Compensation benefits to employees, although the law does not require the employer to provide coverage. 14.9

All of the following statements regarding a Workers' Compensation policy are correct, except: A. Under a Workers' Compensation Policy, a partial disability affects earning capacity but does not indicate a total inability to work B. Part Three of a Workers' Compensation Policy includes Other States Insurance C. Under the Workers' Compensation Policy, survivor income benefits are a percentage of the deceased worker's wages D. Part Two of a Workers' Compensation Policy provides unlimited coverage

D. Part Two of a Workers' Compensation Policy provides unlimited coverage Part Two of a Workers' Compensation policy provides Employers Liability coverage, which is subject to limits, unlike the medical benefits provided under part one of the policy. 14.7

The type of disability of an employee unable to work with no possibility of improvement is called: A. Permanent Partial B. Temporary Partial C. Temporary Total D. Permanent Total

D. Permanent Total Permanent Total refers to total disabilities where no improvement is possible. 14.4

Which of the following is not an element of a temporary total disability? A. The employee is expected to return to work B. The length of the disability must exceed the waiting period C. Retroactive benefits will be paid if disability exceeds the waiting period D. The employee can work while recovering

D. The employee can work while recovering An employee with a temporary total disability would be unable to do any work. 14.4

Under most states' Workers' Compensation laws, medical benefits are: A. Limited to $500,000, aggregate for all accidents B. Limited to $100,000, per employee per year C. Limited to $100,000, for all employees per year D. Unlimited

D. Unlimited Generally, the medical benefits under Workers' Compensation are unlimited. 14.4