Worker Comp and Commercial
Regarding workers compensation and in spite of the exclusive remedy provision, most states permit an injured employee to sue the employer in each of the following situations EXCEPT: Agatha, whose employer did not buy workers compensation insurance Brock, whose injuries were the result of the employer's inadvertent failure to properly train him in the use of a new piece of equipment Dora, whose injuries were the result of the employer's decision to uninstall an important safety function as a cost-cutting measure Flannery, whose employer intended to self-insure but failed to do so
Brock, whose injuries were the result of the employer's inadvertent failure to properly train him in the use of a new piece of equipment
All of the following statements about a commercial general liability policy with a claims-made form are true EXCEPT: Coverage is triggered when the bodily injury or property damage occurs. The claim must be made during the policy period. The act causing the claim must have taken place on or after the policy's retroactive date. A claims-made CGL policy is not required to have a retroactive date.
Coverage is triggered when the bodily injury or property damage occurs.
Andrew works for the interstate rail system and is injured on a train while repairing mechanical equipment. The conductor was operating the train at excessive speed, which contributed to Andrew's injury. Which federal workers compensation law applies to this situation? Federal Employers Liability Act Stevedore Negligence Act Jones Act Outer Continental Shelf Lands Act
Federal Employers Liability Act The Federal Employers Liability Act (FELA) provides employees of interstate railroads with a remedy for an injury sustained on the job without having to overcome employer defenses of assumption of risk or fellow servant liability. An employee's contributory negligence will not bar recovery, but it will reduce it.
Eduardo works for an interstate railroad and is injured on the job. His workers compensation benefits are provided under which of the following federal legislation? Outer Continental Shelf Lands Act (OCSLA) Jones Act Federal Employers Liability Act (FELA) Longshore and Harbor Workers' Compensation Act (LHWCA)
Federal Employers Liability Act (FELA) The Federal Employers Liability Act provides employees of interstate railroads with a negligence remedy for on-the-job injuries.
Employers liability coverage for those who employ interstate railroad workers is provided through the: Waiver of Our Right to Recover from Others endorsement Federal Employers Liability Act Coverage endorsement Longshore and Harbor Workers' Compensation Act Coverage endorsement Maritime Coverage endorsement
Federal Employers Liability Act Coverage endorsement
Alhambra Construction Corp's workers compensation insurance policy has an experience modification factor of 1.8. What effect will this mod have on Alhambra's premium for workers compensation insurance? It indicates average loss experience and will not affect the premium. It indicates a less than average loss experience and will reduce the premium. It indicates no losses and will allow for a minimum premium. It indicates a higher than average loss experience and will increase the premium.
It indicates a higher than average loss experience and will increase the premium.
George hires Hank, whom he knows is not lawfully present in the United States. Hank is George's only employee and he purchases a workers compensation policy to comply with the state's compulsory workers compensation laws. If Hank is injured on the job, how will George's workers compensation insurer respond? It will pay the claim. It will deny coverage. It will cancel the policy. It will fine George.
It will deny coverage.
Henry is a personal trainer at a health club. To help his brother train for a strength competition, Henry secretly removes equipment from the club and gives it to his brother. One night he is loading barbells into his truck when he drops one on his foot. How will the insurer respond when Henry files a workers compensation claim for his broken foot? It pays the claim because the injury occurred at his place of employment. It pays the claim because the injury was caused by the employer's equipment. It will deny the claim because he was committing a crime when he was injured. It will deny the claim because his negligence caused the injury.
It will deny the claim because he was committing a crime when he was injured.
Which of the following federal workers compensation laws would apply to pay for medical expenses incurred by a seaman who is injured on a freighter when high winds and turbulent seas almost sink the ship? Jones Act Federal Employers Liability Act Sue and Labor Clause Outer Continental Shelf Lands Act
Jones Act
What federal law permits seamen to receive workers compensation for workplace injuries if they were partially negligent? Outer Continental Shelf Lands Act (OCSLA) Jones Act Federal Employers Liability Act (FELA) Longshore and Harbor Workers' Compensation Act (LHWCA)
Jones Act The Jones Act provides seamen with a negligence remedy for on-the-job injuries without having to overcome employer defenses against negligence. However, while employee negligence does not bar recovery, recovery is reduced by the proportion of negligence attributable to the employee.
What federal law provides workers compensation benefits to employees who load, unload, repair, and build vessels in maritime employment? Outer Continental Shelf Lands Act (OCSLA) Jones Act Federal Employers Liability Act (FELA) Longshore and Harbor Workers' Compensation Act (LHWCA)
Longshore and Harbor Workers' Compensation Act (LHWCA)
Jackson is a harbor worker who has been injured in the course of his employment. He does not qualify as a seaman under the Jones Act and has been denied state workers compensation benefits. Under what federal law can he obtain workers compensation benefits? Longshore and Harbor Workers' Compensation Act (LHWCA) Outer Continental Shelf Lands Act Federal Employers Liability Act (FELA) Merchant Marine Act of 1920
Longshore and Harbor Workers' Compensation Act (LHWCA) Workers compensation benefits and employers liability coverage for work subject to the LHWCA can be added by endorsement, which extends the scope of workers compensation law to include the LHWCA, and by deleting the LHWCA exclusion from the employers liability section of the policy. This coverage is provided in those states listed in the endorsement schedule.
Clive, a crew member on a seagoing vessel, is injured in an accident while at sea. For this bodily injury to be covered, what endorsement must be added to his employer's workers compensation policy? Longshore and Harbor Workers' Compensation Act Coverage endorsement Outer Continental Shelf Lands Act Coverage endorsement Maritime Coverage endorsement Federal Employers Liability Act Coverage endorsement
Maritime Coverage endorsement
What organization developed a standard workers compensation and employers liability insurance policy, which is used in the majority of states? Workers' Compensation Industrial Relations Board National Workers' Compensation Organization National Council on Compensation Insurance Workers' Compensation Institute
National Council on Compensation Insurance
What entity provides the "standard" policy form for the workers compensation and employers liability policy? National Council on Compensation Insurance (NCCI) Insurance Services Office (ISO) Federal Emergency Management Agency (FEMA) U.S. Congress
National Council on Compensation Insurance (NCCI)
The home office of Ferguson Industries is located in Nebraska. Other offices are located in Kansas and Virginia. Ferguson's workers compensation policy lists Nebraska as the state where coverage applies. The workers compensation statutes of which states are covered by the policy? Kansas, Nebraska, and Virginia Virginia Kansas Nebraska
Nebraska
Aurelio owns a pizza parlor and hires Blythe as a full-time waitress to serve pizza and alcoholic beverages. Aurelio verifies Blythe's age with her birth certificate and driver's license, both of which are fraudulent. If Blythe is injured on the job and files a workers compensation claim, will Aurelio be fined for the illegal employment of a minor? Yes, because a minor was serving alcoholic beverages in violation of state law. Yes, because he employed a minor in violation of the law. No, if a reasonable person would not know that the documents were fraudulent. No, because he did not knowingly hire a minor in violation of the law.
No, because he did not knowingly hire a minor in violation of the law.
Dirk is a sales representative for a pharmaceutical company. He sometimes sells some of the company's products to friends and keeps the money. One day he sells some products to an undercover detective and is injured while resisting arrest. Does Dirk have any means of recovering for his injuries? Yes, he can collect benefits under workers compensation insurance. Yes, he can sue the detective for false arrest. No, because injuries sustained in the commission of a crime are not covered by workers compensation insurance. No, because workers compensation does not apply to employment in sales.
No, because injuries sustained in the commission of a crime are not covered by workers compensation insurance.
Enrique is a partner in Oberon Investments and has a second office in his home. He employs a butler and a landscaper at his home. The landscaper is injured one day while tending the lawn. Can the landscaper get coverage through Oberon's workers compensation policy? Yes, because the landscaper was injured in the course of his employment. No, because the landscaper is not an employee of Oberon. Yes, because Enrique's home office extends the firm's scope of employment. No, because Oberon did not pay the landscaper.
No, because the landscaper is not an employee of Oberon.
Adam suffers an on-the-job injury while serving as an employee of an interstate railroad. However, he is partially responsible for his injury due to his own negligence. Is Adam barred from recovery under the Federal Employers Liability Act? No, an employee's negligence is irrelevant. Yes, he is barred from any recovery because he was negligent. No, but his recovery will be reduced by at least 50 percent due to his negligence. No, but his recovery is reduced by the percentage of negligence attributed to him.
No, but his recovery is reduced by the percentage of negligence attributed to him.
A standard workers compensation policy consists of all of the following parts EXCEPT: Part One - Workers Compensation Insurance Part Three - Other States Insurance Part Two - Employers Liability Insurance Part Four - General Liability Insurance
Part Four - General Liability Insurance
Joan is the sole-proprietor of a small business that employs two people in addition to herself. In most states, how does the workers compensation statute treat Joan? She is automatically covered. She is not covered but may elect to be covered. She is excluded and cannot obtain coverage. She is required to be covered.
She is not covered but may elect to be covered.
Josephine, a saleswoman for Massachusetts-based Concrete Forms, Inc., is injured while visiting one of the company's independent suppliers in Illinois. Even though the supplier is not part of Concrete Forms, Josephine's injury might be covered for workers compensation benefits under which of the following situations, if any? Under no circumstances is she covered under Concrete Forms' workers compensation policy. She may be covered only if she can prove she was in Massachusetts when the injury occurred. She would be covered only if Illinois was listed on the Other States Insurance section of Concrete Forms' workers compensation policy. She would be covered only if she can prove that the supplier was for all practical purposes part of Concrete Forms, Inc.
She would be covered only if Illinois was listed on the Other States Insurance section of Concrete Forms' workers compensation policy.
Jane is self-employed and hires two employees. When she purchases a workers compensation policy for the benefit of her employees, what endorsement would she purchase to provide workers compensation benefits for herself? Sole-proprietors, Partners, Officers, and Others Coverage endorsement Voluntary Compensation and Employer's Liability Coverage endorsement Anniversary Rating Date endorsement Maritime Coverage endorsement
Sole-proprietors, Partners, Officers, and Others Coverage endorsement
With respect to workers compensation, if a farm worker falls from a grain silo and is injured, what remedies, if any, are available to the injured worker? Insist that they be eligible for workers compensation benefits. File a claim under their personal health insurance policy. Sue the employer since they are not eligible for workers compensation benefits. There is no remedy available to an injured farm worker.
Sue the employer since they are not eligible for workers compensation benefits.
What endorsement would an employer add to its workers compensation policy if it wants to provide statutory benefits to an employee who is otherwise exempt from workers compensation coverage? Sole-proprietors, Partners, Officers, and Others Coverage endorsement Voluntary Compensation and Employers Liability Coverage endorsement Anniversary Rating Date endorsement Waiver of Right to Recover from Others endorsement
Voluntary Compensation and Employers Liability Coverage endorsement
Which endorsement to the standard workers compensation policy offers benefits to employees who would otherwise be exempt from statutory workers compensation benefits? Federal Employers Liability Act Coverage endorsement Maritime Coverage endorsement Inclusive Compensation endorsement Voluntary Compensation and Employers Liability Coverage endorsement
Voluntary Compensation and Employers Liability Coverage endorsement
First Street Supply Company has a good business relationship with its main customer, Alliance Metals, which it wants to maintain even if a First Street employee were to get injured while visiting Alliance's factory. Which of the following endorsements might First Street add to its workers compensation policy to minimize potential disputes should that ever happen? Voluntary Compensation and Employers Liability Coverage endorsement Waiver of Our Right to Recover from Others endorsement Federal Employers Liability Act Coverage endorsement General liability Rider endorsement
Waiver of Our Right to Recover from Others endorsement
Kendall Construction needs an endorsement added to its workers compensation policy that stipulates the insurer will not bring an action against Kendall Construction's general contractor if the general contractor negligently causes an injury to one of Kendall's employees. What endorsement do you recommend? Sole-proprietors, Partners, Officers, and Others Coverage endorsement Voluntary Compensation and Employers Liability Coverage endorsement Anniversary Rating Date endorsement Waiver of Right to Recover from Others endorsement
Waiver of Right to Recover from Others endorsement
Vanguard Industries, Inc. employs 100 people in addition to its four executive corporate officers. Wendy, the chief executive officer, does not want workers compensation benefits so she can save her company some money through a reduced premium. In most states, how will Wendy's request be handled? Wendy is required to be covered. Wendy may only be excluded if all executive officers elect to be excluded. Wendy may elect to be excluded. It will be honored; executive officers are never covered.
Wendy may elect to be excluded.
Star Enterprises rents office space and erects partitions and cabinets within the space. Although these are installed at Star's expense, it does not own them. The office sustains a fire and the cabinets and partitions are destroyed. Does Star's commercial property policy cover the loss? No. Star Enterprises had no insurable interest in them. Yes. They are covered as improvements and betterments. Yes, because Star Enterprises leased the space they occupied. Yes, but only through an endorsement.
Yes. They are covered as improvements and betterments.
Aaron became ill at work and was rushed to the hospital. After he submitted bills under his employer's workers compensation policy, his claim was denied because his injury was personal in nature. Assuming the denial was legitimate, what may have caused Aaron's illness? noxious chemicals in the workplace a previously unknown liver condition food poisoning from lunch he bought in the cafeteria an allergic reaction to a snack he bought from a vending machine in the break room
a previously unknown liver condition
Regarding workers compensation, all of the following are generally excluded from coverage due to the nature of their work EXCEPT: a maid in a house a farm laborer a friend who is paid to decorate her friend's boutique a salaried real estate appraiser
a salaried real estate appraiser
All of the following are considered "covered workplaces" in the workers compensation policy purchased by TBC Florist Shops EXCEPT: a TBC Florist Shop listed on the Information Page of the policy a newly-acquired TBC Florist Shop in a state listed on the Information Page of the policy a TBC Florist Shop in a state listed on the Information Page that is not covered by another workers compensation policy a self-insured TBC Florist Shop
a self-insured TBC Florist Shop
To calculate the estimated annual premium an employer will be charged for a workers compensation policy, the unmodified premium is: multiplied by the units of exposure adjusted by an experience modifier divided by the premium rate subtracted from the employer's payroll
adjusted by an experience modifier
Regarding workers compensation, some states allow injured employees of an employer that has not met the state's workers compensation requirements to receive: no benefits 100 percent of the benefits that would be provided through workers compensation up to 50 percent of the benefits that would be provided through workers compensation an additional 10 to 200 percent of the benefits that would be provided through workers compensation
an additional 10 to 200 percent of the benefits that would be provided through workers compensation
Dedham Insurance Company is required by the state to participate in a plan that compels it to share in the issuance of workers compensation policies to high-risk employers within the state. What is this plan called? residual plan monopolistic plan assigned risk plan self-insurance plan
assigned risk plan
Before state workers compensation laws, an employee who was injured on the job and wanted compensation for the injury had to sue the employer. The employer had three common law defenses, which were: unavoidable accident, act of God, and contributory negligence act of God, assumption of risk, and negligence of a fellow employee contributory negligence, unavoidable accident, and assumption of risk assumption of risk, contributory negligence, and negligence of a fellow employee
assumption of risk, contributory negligence, and negligence of a fellow employee
Regarding workers compensation, a surviving spouse is entitled to death benefits in the form of weekly benefits that typically end at age 62 at the earlier of age 65 or remarriage when the youngest child reaches age 26 when the spouse starts collecting Social Security retirement benefits
at the earlier of age 65 or remarriage
Donovan's Supply Company is constructing an additional building to house its equipment and supplies. Which of the following commercial property insurance coverages will cover the building materials and supplies while construction is taking place? business income and extra expense coverage businessowners coverage builders risk coverage property off premises coverage
builders risk coverage
With respect to a commercial property policy, which of the following correctly describes the type(s) of property included in the term "building property"? any property used in the business the building and any business property in the building and on the grounds, including sidewalks and curbs buildings and structures, indoor and outdoor fixtures, including signs attached to the building, and personal property used to service the building fixtures within the building only
buildings and structures, indoor and outdoor fixtures, including signs attached to the building, and personal property used to service the building
Which of the following perils is included on the commercial property Broad Causes of Loss Form but NOT on the Basic Causes of Loss Form? fire collapse smoke vandalism
collapse
Edward is a contractor who is being sued for a construction-related bodily injury sustained by an independent subcontractor. When Edward's insurer defends the suit, it may do all of the following EXCEPT: direct the defense select legal counsel settle the claim within policy limits deposit the policy limits with the insured and walk away from any obligation to defend
deposit the policy limits with the insured and walk away from any obligation to defend
Mel is a salesman for Acme Paper Supply Company and an avid golfer. One day he takes an extended lunch break to sneak in nine holes of golf and is injured in an auto accident while leaving the golf course. On what grounds, if any, might the workers compensation insurer deny Mel's claim? dual capacity third-party-over action personal risk deviation from course of employment
deviation from course of employment
Allison works in a store in Ohio, which is the company's principal business location and home state. She occasionally works in a branch store in Kentucky for several weeks at a time. During one of her visits to Kentucky, she is injured on the job. Under which state's law can she file for workers compensation benefits? either state, presumably the one with the higher benefits only Kentucky, the state in which the injury occurred only Ohio, the company's home state both Ohio and Kentucky
either state, presumably the one with the higher benefits
Zoe was injured on the job and collected workers compensation benefits. However, she sues her employer, claiming it is also legally responsible under the dual capacity doctrine. What type of liability coverage does Zoe's employer need to respond to her liability claim? employer's liability general liability auto liability professional liability
employer's liability
An employer's workers compensation and employers liability policy shows limits of 100/500/100. What coverage do these limits apply to? medical limits employee compensation limits employers liability limits rehabilitation and compensation limits
employers liability limits
What term is used to describe a workers compensation law provision that bars employees injured on the job from making a tort liability claim against their employers if they elect to receive workers compensation benefits? elective benefits compulsory benefits exclusive remedy assumption of risk
exclusive remedy
Bart suffered a serious work-related injury and receives workers compensation benefits while he is unable to work. The injury leads to his death. His wife wants to sue Bart's employer, but her attorney tells her she is prevented from suing the employer because workers compensation law contains a(n): no-fault provision exclusive remedy provision non-litigation provision occupational injury provision
exclusive remedy provision
If an employee who is injured on the job elects to receive workers compensation benefits, they effectively give up their right to sue the employer for those injuries. Which provision in the state's workers compensation laws removes this right to sue? covered employments provision exclusive remedy provision penalties for failure to insure provision independent contractors provision
exclusive remedy provision
With respect to workers compensation insurance, what term is used to describe a worker's reduction in his or her ability to perform work, either temporarily or permanently? rehabilitation disability impairment injury
impairment
For purposes of workers compensation, risks can be categorized as any of the following EXCEPT: personal risk, such as a stroke employment risk, such as a slip and fall neutral risk, such as a hurricane incidental risk, such as a time delay
incidental risk, such as a time delay
The declarations page in a workers compensation policy is called a(n): policy detail page insuring agreement general section information page
information page
Joseph proves that his claim is covered under the workers compensation statute and he is entitled to medical benefits. He also proves that the injury resulted in impairment and the impairment resulted in wage loss. Therefore, what is Joseph now entitled to receive? medical benefits alone replacement of lost income alone medical benefits and wage replacement benefits compensation for pain and suffering
medical benefits and wage replacement benefits
Regarding workers compensation, what benefits is an employee who suffers a disabling injury at work entitled to? disability benefits only medical benefits only medical benefits, disability benefits, and rehabilitation benefits medical benefits and disability benefits only
medical benefits, disability benefits, and rehabilitation benefits
A state that maintains a fund that pays for workers compensation claims is called what type of workers compensation insurance market? voluntary private market state residual market plan assigned risk plan monopolistic state fund
monopolistic state fund
Regarding workers compensation, what term is used to refer to a state that only allows workers compensation to be purchased from the state workers compensation fund? monopolistic state fund exclusive remedy state voluntary private market state residual market
monopolistic state fund
Workers compensation premiums are based on which of the following exposures? gross sales of the business annual receipts of the business payroll of the employees health insurance benefits for employees
payroll of the employees
For workers compensation purposes, a work-related injury from which an employee will never fully recover but yet allows the worker to continue working in some capacity is called a: permanent partial disability permanent total disability temporary partial disability temporary total disability
permanent partial disability
The owner of Boulevard Bakery tells a customer that a competitor, Mel's Donut and Bagel Shop, has a filthy kitchen and does not comply with required safety standards. The customer tells Mel about these comments and Mel sues Boulevard Bakery. Which coverage under Boulevard Bakery's commercial general liability policy might cover the bakery for this claim? bodily injury and property damage liability personal and advertising injury medical payments pollution liability coverage
personal and advertising injury
A worker who dies at work from a heart disease-related heart attack would probably not be eligible for workers compensation benefits because the heart attack is considered a(n): personal risk assumed risk employment risk neutral risk
personal risk
While visiting Archon Corporation, a prospective customer slips and falls in the lobby and breaks his arm. He files a claim against Archon. Which loss exposure covered under the commercial general liability policy applies in this case? products and completed operations liability independent contractor liability contractual liability premises and operations liability
premises and operations liability
Tidewell, Inc. failed to buy workers compensation insurance, despite several notices sent by the state. In addition to fining Tidewell, Inc., what other measure can the state take to compel Tidewell to comply with the state's workers compensation statutes? jail the corporate officers fire its corporate officers file litigation prevent the company from conducting business until it complies
prevent the company from conducting business until it complies
Which of the following is NOT a benefit provided by a workers compensation policy? medical disability rehabilitation property damage
property damage
The Anniversary Rating Date endorsement on a workers compensation policy informs the insured that all of the following may change on the anniversary rating date EXCEPT: recovery rights premium rates experience rating modification factor
recovery rights
Employers unable to purchase workers compensation insurance in the voluntary private market can buy it from the state: self-insurer fund group insurance market monopolistic state fund residual market facility
residual market facility
Gary lost his left hand in a job-related accident. What incentive encourages employers to hire disabled workers such as Gary who have preexisting injuries and might be prone to further injuries? medical payments insurance second injury fund disability benefits rehabilitation benefits
second injury fund
A company that does not want to buy workers compensation insurance may comply with the state's requirement to provide it to employees by depositing with the state securities in a specified amount. In effect this means becoming a(n): assigned risk plan self-insurer residual market monopolistic insurer
self-insurer
Snow Industries violates state law and operates without complying with the state's compulsory workers compensation statute. If an injured worker sues Snow Industries for a work-related injury, how does the statute protect it? after the first $25,000 of damages statute provides no protection partially up to the first $25,000 of damages
statute provides no protection
Angela works for Metro Printing Company, which uses equipment manufactured by the Superior Company. Angela is injured while using a Superior paper cutter. Investigation reveals that the machine was defective. The workers compensation insurer pays Angela the required benefits and then sues Superior to recover the payment. What gives it the right to sue Superior? subrogation elective coverage arbitration vicarious liability
subrogation
Regarding workers compensation, which of the following would describe a disabling work-related injury that leaves the employee unable to work in any capacity for a period of time but for which total recovery is reasonably expected? temporary total disability temporary partial disability permanent total disability permanent partial disability
temporary total disability
In a state where businesses can buy workers compensation insurance from insurers that issue business policies, including commercial property, commercial general liability, and commercial auto insurance, this is called a: monopolistic state fund voluntary private market competitive state fund organization state residual market plan
voluntary private market
What does a worker suffer if he is unable to work because of an impairment that results from a workplace injury? early termination from work demotion at work job loss wage loss
wage loss
If the workers employed by a factory are assigned a workers compensation classification code with a rate of $8.00 and the employer has payroll of $200,000 for that classification code, what is the unmodified premium for that classification? $800 $1,600 $8,000 $16,000
$16,000
If the bus drivers employed by a business are assigned a workers compensation classification code with a rate of $2.50 and the employer has payroll of $100,000 for that classification code, what is the unmodified premium for that classification? $25,000 $2,500 $250 $25
$2,500
With respect to workers compensation disability benefits, the most common waiting period before benefits begin is: 3 days 7 days 10 days 14 days
3 days
Uptown Deli inquires about purchasing workers compensation (WC) insurance. When you provide a quote, the owner indicates the premium is too high and he doesn't want to provide coverage for all employees. What do you tell him about covered employments? All employments must be covered unless exempted by WC statute. All employments must be covered. Only dishwashers are exempt by law. Delis are exempt from WC statute.
All employments must be covered unless exempted by WC statute.
