P&C Chapter 14 - Workers' Compensation Insurance

All of the following would be covered under Workers' Compensation Insurance, except: A: An employee who contracts a cold in the winter B: An employee injured on the job by a product of the employer C: An employee injured by machinery in the work place D: An employee who becomes ill due to exposure to chemicals used in the employee's workplace

A: An employee who contracts a cold in the winter

In California, Workers' Compensation is available through: A: Both private insurers and the State Fund B: The State Fund only C: Neither private insurers nor the State Fund D: Private insurers

A: Both private insurers and the State Fund

In California, who may transact 24-Hour Care Coverage? A: Either an accident and health agent, or a property and casualty broker-agent B: An accident and health agent only C: A property and casualty broker-agent only D: Any licensed agent

A: Either an accident and health agent, or a property and casualty broker-agent In the state of CA, an Accident and Health Agent or a Fire and Casualty Broker-Agent are authorized to transact 24-Hour Care Coverage

Which type of Workers' Compensation benefits are usually unlimited? A: Medical B: Death C: Rehabilitation D: Disability

A: Medical

Which of the following is NOT a criterion for distinguishing an employee from an independent contractor? A: Number of hours worked B: Retaining the right to direct the way work shall be completed C: Supplying the necessary equipment and tools to complete work D: Controlling the frequency and timing of compensation for work

A: Number of hours worked A worker is an independent contractor if he/she determines how work is conducted and compensated, and supplies his or her own equipment. Independent contractors are not eligible for Workers' Compensation, and must purchase their own liability insurance

Under the Voluntary Compensation Endorsement to a Workers' Compensation Policy, when an employer desires to provide Workers' Compensation Coverage to the employees, even though the law does not require the employer to provide coverage, he/she must provide which of the following? A: The class of employees to be covered B: The benefits of the designated State's Workers' Compensation law C: The designated beneficiary D: The number of years the business has had employees

A: The class of employees to be covered The same information is needed for obtaining the Voluntary Compensation Endorsement as is needed for obtaining coverage required by law

Under the U.S. Longshore and Harbor Workers' Compensation Act, all of the following are included, except: A: The crew of the ship B: Workers who build ships C: Workers who repair ships D: Workers who load and unload ships

A: The crew of the ship The U.S. Longshore and Harbor Workers' Compensation Act applies to workers who load, unload, build, or repair ships (but not to the crew of the ship).

Temporary Total Disability may be defined as: A: The inability to return to any employment while recovering B: No improvement possible C: Not returning to the former occupation D: Any disability that extends beyond 60 days

A: The inability to return to any employment while recovering Temporary Total Disability means the inability to return to any employment while recovering

Under medical benefits for Workers' Compensation, most states provide what type of coverage for injuries that occur while the employee is on the job? A: Unlimited coverage B: Unlimited coverage after the application of a small deductible, which varies from state to state C: Full medical benefits, up to $500,000 D: Unlimited coverage on an 80/20 percent coinsurance basis for the first $10,000 of benefits

A: Unlimited coverage Most states provide unlimited coverage for all necessary medical and hospital expenses relating to the covered injury

Which statement is true regarding Workers' Compensation? A: Workers' Compensation will not cover pain and suffering B: The basic limit for Employer Liability Coverage for injury per accident is unlimited C: An employee is entitled to benefits under Workers' Compensation arising out of work only if the employer carries Workers' Compensation Insurance D: The Other States part of Workers' Compensation provides coverage for liability suits brought against employers outside the US or Canada

A: Workers' Compensation will not cover pain and suffering Workers' Compensation coverage covers actual medical expenses, but not pain and suffering

Temporary total benefits are subject to a waiting period of how many days? A: 21 B: 3 C: 14 D: 1

B: 3 Benefits begins after a waiting period of 3 days. Retroactive benefits will later be paid back to the initial date of disability, if the disability lasts beyond 14 days

Which of the following claims is not covered under Workers' Compensation Insurance? A: An employee injured on the job by a product of the employer B: An employee who contracts a cold in the winter C: An employee who becomes ill because of exposure to chemicals used in the employee's workplace D: An employee injured by machinery in the work place

B: An employee who contracts a cold in the winter Simply developing a cold in the wintertime is not enough to establish a Workers' Compensation claim--it would have to be established that working conditions caused the cold to develop to justify a Workers' Compensation Claim

Which of the following would be a covered injury? A: An injury sustained intentionally B: An injury sustained because of the employee's own negligence C: An injury sustained during hours that were not designated for work D: An injury sustained while intoxicated

B: An injury sustained because of the employee's own negligence Workers' Compensation is paid without regard to negligence, provided the injured employee has not injured himself/herself intentionally, and the injury has not arisen out of the injured employee's intoxication. The injured employee must be working the hours he/she is designated, or expected, to work

The type of insurance that bridges the gap between Workers' Compensation coverage and the CGL is: A: Errors and Omissions B: Employers Liability C: The Second Injury Fund D: Professional Liability

B: Employers Liability Employers Liability insurance covers the gap between the Workers' Compensation policy and the General Liability policy

Which principle prevents an injured worker for suing for a larger reward than would be paid through a Workers' Compensation claim? A: Contributory Negligence B: Exclusive Remedy C: Assumption of Risk D: Comparative Negligence

B: Exclusive Remedy Exclusive remedy means that the employer assumes absolute liability for injuries to the employee. under Workers' Compensation, if the employee is injured, the employee may not collect benefits and then sue the employer for negligence or liability, or refuse to accept compensation benefits in order to sue the employer for a larger reward

Which of the following statements about Workers' Compensation in California is true? A: California is a voluntary Workers' Compensation state B: The State Fund functions as a public insurer competing with private insurers in the Worker's Compensation market C: 24 Hour Coverage is illegal in California D: California does not allow employers to self-insure

B: The State Fund functions as a public insurer competing with private insurers in the Worker's Compensation market Some states, in lieu of Assigned Risk Plans, have established State Insurance Funds as an alternative for an employer to purchase Workers' Compensation Insurance. In CA, this fund is known as the State Compensation Insurance Fund (called "State Fund" for short). The fund operates as a public insurer that competes with private insurers in the class of Workers' Compensation Insurance, and issues a policy similar to those issued by private insurers conforming to the Workers' Compensation laws of the state.

Which statement is false regarding the California State Compensation Insurance Fund? A: Licensed brokers may place business with the fund in behalf of an insured B: This fund is also known as the Second Injury Fund C: Employers are allowed to purchase Workers' Compensation Insurance directly from the fund D: The fund operates as a public insurer that competes with private insurers in the class of Workers' Compensation Insurance

B: This fund is also known as the Second Injury Fund The Second Injury Fund is for payment of compensation to an employee that has suffered a prior disabling injury and now sustains a subsequent injury. The CSCIF is a market alternative

The minimum aggregate liability limit for disease under the Employers liability policy is how much? A: $150,000 B: $300,000 C: $500,000 D: $100,000

C: $500,000 The minimum limits are $100,000 per accident for injuries, $100,000 per employee for disease, and $500,000 aggregate for disease

Which of the following is true concerning Workers' Compensation benefits? A: Benefits are paid only upon determination of negligence on the part of the employer B: Benefits are paid only if there was no negligence on the part of the employee C: Benefits must be paid to employees for their on-the-job injuries, regardless of negligence on anyone's part D: Benefits are paid for injuries sustained on or off the job

C: Benefits must be paid to employees for their on-the-job injuries, regardless of negligence on anyone's part Workers' Compensation benefits are paid for on-the-job injuries regardless of whether there was negligence involved, or, if negligence was involved, the negligence was by the employer or the employee

Bodily injury to an employee is excluded under Commercial General Liability Insurance because: A: It falls under the doctrine of contributory negligence B: It falls under the doctrine of assumption of risk C: Coverage is provided under Workers' Compensation D: The employee is considered an insured

C: Coverage is provided under Workers' Compensation General Liability policies exclude injuries to employees because they are covered by Workers' Compensation

Which type of injury prevents an employee from being able to do any work for the rest of his/her life? A: Permanent partial B: Temporary total C: Permanent total D: Temporary partial

C: Permanent total Permanent total disability describes an injury that prevents an employee from being able to do any work for the rest of his/her life. Benefits are subject to the same weekly benefit percentage and the same minimum and maximum limits as Temporary Total. Benefits are paid for life

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

C: The cost is paid by the employee The cost of the Workers' Compensation program is paid by the employer

Under the Workers' Compensation Policy, all of the following are true, except: A: The policy covers litigation costs taxed against the insured B: The bodily injury must be caused by the conditions of employment C: Coverage applies to BI due to disease, as well as to injury due to accident D: An accident occurring after the policy period expiration date would be covered

D: An accident occurring after the policy period expiration date would be covered The accident causing the bodily injury must occur during the policy period.

Which of the following is the best description of the Voluntary Compensation Endorsement under Workers' Compensation Insurance? A: It provides coverage for independent contractors B: It provides coverage for unpaid volunteer workers C: It provides coverage for employees who option out of coverage under the standard Workers' Compensation policy D: It provides coverage to employees that are not otherwise covered

D: It provides coverage to employees that are not otherwise covered Employers who do not come under the Workers' Compensation law of their state may elect to provide Workers' Compensation coverage for their employees through the Voluntary Compensation Endorsement

Which type of rating system categorizes employees according to their statistically common risk exposures? A: Retrospective Rating B: Premium Discount C: Experience Rating D: Manual Rating

D: Manual Rating Under Manual Rating, the rates for Workers' Compensation are based upon job classifications. The main purpose is to categorize employees according to their common exposures

In California, which of the following Workers' Compensation coverages pays unlimited benefits? A: Rehabilitation B: Survivor's benefits C: Disability D: Medical

D: Medical Most states, including CA, provide unlimited coverage for all necessary medical (including hospital) expenses related to a covered injury

The kind of Workers' Compensation rating system which pays a dividend to the insured if experience falls within a set of guidelines is called: A: Premium Discount B: Retrospective C: Manual D: Participating Plans

D: Participating Plans Under the Participating Plans rating system, the insured is eligible for a premium refund (dividend) if the experience over the policy period falls within the guideline established by the insurer. This provides for effective insurance based upon the current policy period

When an employee is unable to work and no possibility of improvement exists, the disability is called: A: Completely injured B: Temporary Total C: Temporary Partial D: Permanent Total

D: Permanent Total

All of the following are true about Temporary Partial Disability benefits, except: A: The benefits are calculated as a percentage of the difference in the wages B: The employee is able to do some work C: The employee's wages, while disabled, are less than before the injury D: The employee will never return to previous wages

D: The employee will never return to previous wages Under Temporary Partial Disability, it is expected that the employee will return to the same job after recovery.

Which statement is true of medical benefits under California Workers' Compensation? A: They are limited by time, but have no dollar limits B: They are limited by both time and dollar limits C: They have dollar limits, bot not time limits D: They are not limited by either time or dollar limits

D: They are not limited by either time or dollar limits

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

D: 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