Chapter 14

Under Workers' Compensation insurance, the insured is responsible for paying benefits for: A Knowingly hiring an employee in violation of the employment law B Appeal bond premiums C When the insured incurs expenses requested by the insurer D Taxes on litigation

A The insured must also pay because of his serious or willful misconduct, failure to comply with safety regulations, or discrimination.

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 Doctrine of Dual Capacity C Consequential Injury Fund D Loss of Services

B

The Employers Liability pays for all the following for which the insured is legally obligated to pay, except: A Care and loss of services B Injuries claimed by a third party as a result of worker's injuries C Intentional injury by the employee D Consequential injury to dependents

C

Employers Liability applies under which of the following circumstances: A Punitive damages awarded because an employee was employed in violation of law B An obligation imposed by a Disability Benefits law C The employee is allowed to sue the employer for negligence D Liability is assumed under a contract

C 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.

Types of Laws

Compulsory - In jurisdictions where Workers' Compensation benefits are mandated by state law, employers are required to provide Workers' Compensation benefits to their employees - either via insurance or self-insurance. If the provisions of a policy do not comply with the state law, the insurer is required to provide all legally mandated benefits. Elective - In jurisdictions where Workers' Compensation benefits are not mandated by state law, employers have the choice to accept or reject state Workers' Compensation laws. If an employer chooses to reject the Workers' Compensation laws and an employee is injured, the employee may then file a claim or lawsuit against the employer for injuries; and the employer is denied the use of common law defenses, such as assumption of risk, contributory negligence, and negligence of a fellow employee.

Which of the following Workers' Compensation programs applies to sailors injured due to the negligence of others? A Defense Base Act B Harbor Workers' Compensation Act C Federal Employer's Liability Act D Jones Act

D

Which of the following is the sole representative under the policy? A Employer and his partners B Named Insured C Company legal representative D First Named Insured

D The First Named Insured will receive any cancellation notice and receive any unearned premium

If an employer cannot obtain Workers' Compensation coverage for his employees, which of the following is an alternative? A Surety Fund B State Claim Fund C Workers' Compensation 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

Premium

Final Premium - The final premium will be determined, after this policy ends, by using the actual, not the estimated, premium basis and the proper classification that applies by law. If cancelled: By the Insurer - The final premium will be calculated pro rata for the time the policy was in force. By the Insured - The final premium will be based on the time the policy was in force and increased by the insurer's short rate cancellation table.

Workers' Compensation and Employers Liability Insurance Policy

General Section The Policy - Establishes that the policy is a contract between the employer and the insurer. The terms of the policy may not be changed or waived, except by endorsement. Who is Insured - Establishes that the employer is the insured. Workers' Compensation Law - The law of each state or territory named in the Information Page. State - Any state in the United States, including the District of Columbia. An injured employee is entitled to benefits provided by the state where the injury occurs. Locations - All workplaces, locations, and states listed in the Information Page.

Federal Workers' Compensation Laws

In addition to state Workers' Compensation programs, federal laws governing certain types of employees: The Federal Employers Liability Act (FELA) applies to interstate railroad workers. 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). The Jones Act or Merchant Marine Act of 1920 applies to sailors injured by the negligence of others. The Federal Employees Compensation Act applies to all U.S. civilian employees. Defense Base Act applies to workers on military bases outside the United States.

Types of Laws

Monopolistic States - Workers' Compensation insurance is only available through a state fund. Competitive States - Workers' Compensation insurance is available through private insurers as well as any state fund that may exist.

Part Two - Employers Liability Insurance

Part two of the policy, Employer's Liability, provides insurance for bodily injury and other damages for which the insured becomes liable outside of Workers' Compensation statute and occupational disease laws. If someone is permitted by law to sue the insured for negligence or other tort damages, this part of the policy applies. The insurance protects the insured against damages under the Doctrine of Dual Capacity, which applies when an employee is injured by a product the employer manufactures.**

Part One - Workers' Compensation Insurance

Payment the Insured Must Make (This is the exclusion section of the policy) - The insured is responsible for paying benefits in excess of those provided by the Workers' Compensation law, including those required because of the: Insured's serious or willful misconduct. Insured knowingly employing an employee in violation of law. Insured failing to comply with health or safety laws. Insured firing, coercing, or otherwise discriminating against any employee.

Benefits Provided (Determined by State Law)

Second Injury Fund The Second Injury Fund pays compensation on behalf of an employer to an employee who has already suffered a prior disabling injury, and now sustains a subsequent injury, and the combination of the two injuries creates a greater disability than the second injury would have created by itself.

Exempt Workers

Some states exempt workers based on job duties. Examples include: Agricultural workers, such as farm and ranch laborers. 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. The definition of independent contractor varies by state, as do requirements for Workers' Compensation and exempt status. Sole - Owners, Partners, and Corporate Officers.