Ch 14 Workers Comp
Compulsory vs. Elective
*Compulsory - Employers required to provide Workers' Compensation benefits to employees or demonstrate the ability to provide. *Elective - Employers have choice to accept or reject Workers' Compensation laws.
Exempt Workers
- Agricultural workers - Domestic employees - Casual laborers - Those whose work is non-recurring or irregular - Independent Contractors - Plumbers, electricians, and landscapers who work under contract for more than one employer. - Sole - Owners, Partners, and Corporate Officers
Which of the following is not an element of a temporary total disability? A The employee can work while recovering B Retroactive benefits will be paid if disability exceeds the waiting period C The employee is expected to return to work D The length of the disability must exceed the waiting period
A. An employee with a temporary total disability would be unable to do any work.
Under the Workers' Compensation policy, the insurer may audit the insured's records for a period of how many years following policy termination? A 3 B Zero C 2 D 1
A. The insurer may audit records pertaining to the policy at any time and for up to 3 years after the policy period ends.
Three common law defenses
Assumption of risk Contributory negligence Fellow servant rule
The Employers Liability pays for all the following for which the insured is legally obligated to pay, except: A Injuries claimed by a third party as a result of worker's injuries B Intentional injury by the employee C Consequential injury to dependents D Care and loss of services
B. Employers must be legally obligated to pay and the employer is also responsible for injuries to employees that arise out of the employment, but claimed against the insured while the insured is in a capacity other than as employer. Intentional injury by the employee is not covered.
Which of the following workers would be eligible for Workers' Compensation? A Farm laborer B Casual laborer C Part-time worker D Domestic employees
C. Agricultural or farm workers, domestic employees, and casual laborers are common exclusions to eligibility. Part-time workers under an eligible plan must be covered.
When an employee is injured by a product manufactured by the employer, the Employers Liability will provide coverage under which of the following? A Third-party Action Claim B Consequential Injury Fund C Doctrine of Dual Capacity D Loss of Services
C. Doctrine of Dual Capacity applies when an employee is injured by a product the employer manufactures.
Which statement is true regarding the Employers Liability Insurance Part of Workers' Compensation? A It provides coverage for a worker injured in a state that is not listed on the Declarations B It includes employees as additional insureds C It provides coverage for employment-related liability outside of Workers' Compensation statute D It is optional coverage not needed by most employers
C. Employers Liability covers suits for injuries and their consequences that are not covered by Workers' Compensation.
To whom are Workers' Compensation survivor benefits paid? A A worker who survives an injury B The employer of a deceased employee C The spouse and/or dependent child of a deceased worker D An employer who survives an attack by an employee
C. If a workplace injury results in the employee's death, survivor benefits are paid to the employee's surviving spouse and/or children.
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. 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.
Each of the following is an exempt worker under Workers' Compensation statutes, except: A Independent contractor B Sole proprietor C Farm laborer D Employee in a company of 100 employees
D. Some states exempt workers of employers with fewer than three employees.
Monopolistic vs. Competitive
*Monopolistic - Workers' Compensation insurance only available through state fund. *Competitive - Workers' Compensation insurance available through private insurers.
Under most states' Workers' Compensation laws, medical benefits are: A Limited to $100,000, for all employees per year B Limited to $500,000, aggregate for all accidents C Unlimited D Limited to $100,000, per employee per year
C. Generally, the medical benefits under Workers' Compensation are unlimited.
The insured would be required to pay which of the following in the event of a Workers' Compensation claim? A Interest applied to the final judgment for the delay in payment B Premiums for the appeal bonds when the insurer appeals to a higher court C Any excess amounts incorrectly paid by the insurer D Expenses the insured spends to appear in court to assist the defense
C. If the insurer makes any excess payments, the insured must promptly reimburse the insurer and also pay for any benefits in excess of those provided by the Workers' Compensation law.
Which of the following Workers' Compensation programs applies to sailors injured due to the negligence of others? A Harbor Workers' Compensation Act B Federal Employer's Liability Act C Jones Act D Defense Base Act
C. Jones Act 1. The Federal Employers Liability Act (FELA) applies to interstate railroad workers. 2. The U.S. Longshoremen and Harbor Workers' Compensation Act applies to workers who load, unload, build, or repair ships (but not to the crew of the ship). 3. The Jones Act or Merchant Marine Act of 1920 applies to sailors injured by the negligence of others. 4. The Federal Employees Compensation Act applies to all U.S. civilian employees. 5. Defense Base Act applies to workers on military bases outside the United States.
Which of the following is true regarding the Workers' Compensation Assigned Risk Plan? A It is reserved for those employers who have better-than-average loss experience B It provides more limited benefits than those provided by the voluntary insurance programs C Any employer who is unable to purchase coverage in the voluntary market can obtain coverage under the Assigned Risk Plan D It is used exclusively for Voluntary Workers' Compensation Insurance
C. 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.
The Workers' Compensation policy's guidelines for providing other state coverage do not include which requirement? A The insurer must reimburse the insured for any payments the insurer is not allowed to pay B The insured must notify the insurer within 30 days when entering a state not listed on the policy C If the insured begins work in a covered state after the effective date of the policy the other in force insurance, if any, applies D Monopolistic states may be listed on the information page
D. Employers with operations in the monopolistic states must purchase coverage directly from the state entity that sells this coverage.
What type of Workers' Compensation benefits are provided to the dependents of a deceased employee? A Disability benefit B Rehabilitation benefit C Medical benefit D Survivor benefit
D. Survivor income benefits are a percentage of the deceased worker's wages and are also provided to the surviving spouse (and usually end at remarriage); and/or children (until age 18, and sometimes longer if a full-time student).
Which of the following is the sole representative under the policy? A Employer and his partners B Company legal representative C Named Insured D First Named Insured
D. The First Named Insured will receive any cancellation notice and receive any unearned premium.
Which of the following is used by an employer who wants to provide Workers' Compensation benefits even when it is not required? A Stop-Gap Endorsement B Other Insurance Endorsement C Secondary Injury Fund D Voluntary Compensation Endorsement
D. The voluntary compensation 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.
If an employer cannot obtain Workers' Compensation coverage for his employees, which of the following is an alternative? A Workers' Compensation Fund B Surety Fund C State Claim Fund D Assigned Risk Plan
D. This state Plan offers Workers' Compensation coverage for employers who are unable to purchase coverage in the voluntary market, and all authorized Workers' Compensation insurers in the state must participate in the Plan.
At what age will the child of an employee who died due to a work-related injury no longer be eligible to receive benefits from Workers' Compensation? A 21 B 18 C 21 if not a full-time student D 18 if not a full-time student
D. Upon the job-related death of an employee, Survivor Benefits are provided to dependent children until the age of 18, unless the child is a full-time student or permanently disabled.
All of the following are covered injuries occurring during the course of employment, except: A Injury must occur while the employee is at work B The employee is performing regular job duties C Illness is contracted on the job D Injury occurs while the employee is playing in a company softball game
D. While it is a company game, it does not occur while working, performing the assigned jobs, during the designated work hours, and it is not reasonably related to employment.
Second Injury Fund
Pays compensation on behalf of an employer to an employee who has already suffered a prior disabling injury. Employer is responsible only for compensation that would have been paid had the second injury occurred without the existence of the prior injury, and the fund pays the difference. Encourage employer to hire people with disabilities.
Under the Workers' Compensation policy, physical therapy benefits are a type of: A Disability benefit B Survivor benefit C Medical benefit D Rehabilitation benefit
D. The rehabilitation benefits physical therapy and vocational training are utilized with the objective of returning the injured employee to work as soon as possible.
A claims adjuster would not pay which of the following Employers Liability claims? A An employee is injured while playing softball at a company picnic at a nearby park B An employee claims reimbursement expenses for the transportation service her daughter takes to school, after suffering a work-related injury that prevents her from driving C An injured employee's daughter claims mental anguish over her father's injury at work D A single mother claims reimbursement expenses for the housekeeper she hired while she remains on strict bed rest as the result of a work injury
A. An injury must arise out of actual employment to provide cause for a claim under the Employers Liability section of the Workers' Compensation policy.
Employers Liability applies under which of the following circumstances: A The employee is allowed to sue the employer for negligence B Liability is assumed under a contract C Punitive damages awarded because an employee was employed in violation of law D An obligation imposed by a Disability Benefits law
A. Employer's Liability provides insurance for bodily injury and other damages for which the insured is liable outside of Workers' Compensation and the employee is permitted by law to sue the insured for negligence.
Which of the following is not required by the Workers' Compensation policy's guidelines for providing "Other State" coverage? A The state work is performed in may not be a compulsory state B If the insured begins work in a covered state after the effective date of the policy, the insurance, will apply if no other coverage exists C The insurer must reimburse the insured for any payments the insurer is not allowed to pay directly D The insured must notify the insurer within 30 days when an employee begins work in a state not listed on the policy
A. Employers with operations in monopolistic states must purchase coverage directly from the state entity that sells this coverage. There is no prohibition regarding employers with operations in compulsory states. Compulsory - Employers required to provide Workers' Compensation Elective - Employers have choice to accept or reject Workers' Compensation laws.
The part of the Workers' Compensation Policy that defines how coverage applies in other states is: A Part Three B Part Four C Part Six D Part Five
A. Since an employee may file for Workers' Compensation benefits of the state in which he/she is injured, it is important that all states where the employer has operations be included in coverage. Part Three provides this coverage, applying to states individually listed in the Declarations.
Which coverage is not included in a Workers' Compensation policy? A Second injury fund B Employer's liability C Medical benefits D Disability income benefits
A. 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.
Which statement is false regarding Workers' Compensation? A The premium is paid by the employee B It covers investigation and defense costs C It pays medical expenses, loss of time benefits and death benefits D Payment is made without regard to negligence
A. The cost of the Workers' Compensation program is paid by the employer.
All of the following statements regarding the Voluntary Compensation endorsement is correct, except: A It exempts employers from state Workers' Compensation law. B The employees must waive their right to sue and accept coverage under the endorsement C The class of employees to be covered must be provided D The state of employment must be provided
A. 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.
Which disability income benefit covers an injury that allows an employee to do some work, but is unable to earn his or her usual wage until full recovery? A Scheduled Injury B Temporary Partial C Temporary Total D Permanent Partial
B. Temporary Partial benefits are generally calculated as a percentage of the difference in wages.
Which of the following types of Workers' Compensation laws is available through a state fund? A Competitive B Monopolistic C Compulsory D Elective
B. The Monopolistic law is only available through a state fund, and the Elective version allows employers to accept or reject the state Workers' Compensation law.
All the following injuries are covered under a Workers' Compensation policy, except: A An employee who is injured solely through his/her own negligence B An employee whose injury results from intoxication C An employee injured because of unsafe working conditions D An employee who is injured despite the extensive safety measures of the employer
B. The employer can deny benefits to an employee who intentionally injures himself/herself or if injury results from intoxication.
Under Workers' Compensation insurance, the insured is responsible for paying benefits for: A Appeal bond premiums B Knowingly hiring an employee in violation of the employment law C Taxes on litigation D When the insured incurs expenses requested by the insurer
B. The insured must also pay because of his serious or willful misconduct, failure to comply with safety regulations, or discrimination.
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 U.S. Longshoremen and Harbor Workers' Compensation Act C The U.S. Contributory Liability Act D The Federal Employers Liability Act
B. The only coverage available for workers who load, unload, build and repair ships is the U.S. Longshoremen and Harbor Workers' Compensation Act.
Which of the following statements is false regarding Workers' Compensation law? A An employee may not refuse Workers' Compensation benefits in order to sue the employer for a larger award B Employers are liable for injuries occurring outside the course of employment C Benefits are paid for on-the-job injuries, regardless of negligence D The employer assumes absolute liability for injuries that arise out of and in the course of employment
B. Workers' Compensation Insurance covers employee's injuries arising out of and in the course of employment, and these benefits are the exclusive remedy for the employee injured under these circumstances.
Which statement regarding the purpose of Employers Liability Insurance is false? A It covers claims that are not covered by Part I of the policy B It protects the employer against tort claims C It extends policy benefits to states not listed on the Declarations page D It includes coverage for consequential bodily injury
C. Part II does not extend the coverage to other states. Other States Insurance is provided by Part III.
Which of the following workers would be covered by The Federal Employers Liability Act? A A sailor injured by the negligence of others B A shipbuilder C A railroad worker D An employee of the Federal government
C. The Federal Employers Liability Act (FELA) applies to interstate railroad workers. This is not to be confused with The Federal Employees Compensation Act, which applies to all U.S. civilian employees.
Under the U.S. Longshoremen and Harbor Workers' Compensation Act, all of the following are covered, except: A Workers who load and unload ships B Workers who repair ships C The crew of a ship D Workers who build ships
C. The U.S. Longshoremen and Harbor Workers' Compensation Act applies to workers who load, unload, build, or repair ships (but not to the crew of the ship).
In which section of the Workers' Compensation and Employer Liability policy would the policy conditions be found? A Part Eight B Part Four C Part Six D Part Two
C. The policy Workers' Compensation contains the following parts: General Section, Part One - Workers' Compensation Insurance, Part Two - Employers Liability Insurance, Part Three - Other States Insurance, Part Four - Your Duties if Injury Occurs, Part Five - Premium, Part Six - Conditions.
Exclusive remedy means that: A Once an employee has been compensated for an injury by Workers' Compensation, the policy will not pay for any subsequent injuries B Only full time employees are eligible for Workers' Compensation insurance C Employees covered by Workers' Compensation insurance cannot sue for work-related injury D The employer may decide which types of employee are eligible for coverage by a Workers' Compensation policy
C. Workers' Compensation insurance is the exclusive remedy for workplace injuries. This means an injured worker cannot obtain other insurance for workplace injuries or their related medical expenses and lost wages. Injured workers are not permitted to sue an employer for injuries if covered by Workers' Compensation insurance.
