Unit 20: Workers' Compensation
How many coverage parts are there to a workers' compensation policy?
6. The workers' compensation policy provides bodily injury and employers liability coverage. The other 4 parts of the policy outline other states' insurance, duties of the insured, premiums, and conditions.
Which of the following statements about workers' compensation is NOT correct? A) An employee who is eligible for workers' compensation coverage may sue a negligent employer. B) Workers' compensation covers work-related injuries C) An employee must accept the benefits mandated by law. D) Most occupations are subject to state workers' compensation laws
A) An employee who is eligible for workers' compensation coverage may sue a negligent employer. It is an exclusive remedy, which means that the employee cannot sue the employer for work-related illnesses or injuries.
Which part of the Workers' Compensation and Employers Liability Policy coverage explains how the cost of the policy is determined? A) Part Five B) Part Three C) Part Two D) Part Four
A) Part Five
Part Two, employers liability insurance, of workers' compensation insurance policy includes all of the following limits of liability EXCEPT A) for all compensation paid under benefits required by workers' compensation law B) for each employee injured by disease during the policy term C) for all bodily injury arising from a single accident D) for all bodily injury by disease during the policy term
A) for all compensation paid under benefits required by workers' compensation law
Bill's construction company had an experience modification factor added to his workers' compensation policy. How might this affect his premium?
An experience modification factor is applied as a method of rewarding those employers with better-than-average loss experience and penalizing those with poorer experience.
Which common law defense allowed the employer to deny liability on the basis that the employee knew what the situation was like before employment and assumed all of the risk of injury?
Assumption of risk
Which one of the following methods is used if an employer sets up a fund to pay workers' compensation claims? A) A monopolistic method B) A self-insurance method C) A private insurer method D) A competitive method
B) A self-insurance method
Which one of the following statements about workers' compensation insurance is NOT correct? A) Self-insurance of workers' compensation is permitted. B) Every type of employment is subject to workers' compensation laws. C) Coverage for lost wages is a benefit of workers' compensation insurance. D) Workers' compensation policies provide benefits for rehabilitation.
B) Every type of employment is subject to workers' compensation laws. Possible exceptions include corporate officers who are sole shareholders, domestic employees who work a limited number of hours, and agricultural workers.
Janet, an employee of Carla's Computer Repair, is injured while playing baseball for the company-sponsored softball team. Under which policy would Janet find coverage for her injuries? A) Part one of workers' compensation B) Health insurance C) Part two of workers' compensation D) Parts one and two of workers' compensation
B) Health insurance Because Janet is not in the course of employment when she is injured, there would be no coverage under Carla's workers' compensation policy.
Bob's construction company, based in Wisconsin, is doing a job in Illinois. Bob's declaration page for his workers' compensation policy lists Minnesota, Iowa, Illinois, and Wisconsin as states where he will do work. Pete, an employee working in Illinois, is injured on the job. How would Bob's policy respond? A) It will pay benefits only if Bob is held liable. B) It will pay benefits based on Illinois workers' compensation laws. C) Pete may choose coverage under the benefits that are best for him. D) It will pay benefits as if Pete had been injured in Wisconsin.
B) It will pay benefits based on Illinois workers' compensation laws.
Which part of the Workers' Compensation and Employers Liability Policy coverage provides automatic coverage for states not specifically listed on the information page for Part One coverage? A) Part Five B) Part Three C) Part Two D) Part Four
B) Part Three
Sue, an employee of Paul's Bicycle Shop, was on a service call repairing some bicycles at Bill's home. On her way back to the shop, she was involved in an automobile accident and injured. Where would sue find coverage? A) Both Paul's auto policy and workers' compensation policy B) Paul's workers' compensation policy C) Paul's auto policy D) Her own auto policy
B) Paul's workers' compensation policy
Which one of the following determines the amount of a workers' compensation claim? A) Agreement of the parties B) State law C) Federal law D) Mandate of the Commissioner
B) State law
Which of the following is NOT a benefit that is paid under workers' compensation laws? A) Disability income B) Medical C) Pain and suffering D) Rehabilitation
C) Pain and suffering
Barney's Breads and Bakery store needs workers' compensation coverage for his 7 employees. He could purchase coverage from all of the following sources EXCEPT A) self-insurance or group insurance if available B) a private insurance carrier C) an assigned risk plan D) the state fund
C) an assigned risk plan
Occupational diseases are covered under workers' compensation. All of the following are occupational diseases EXCEPT A) black lung disease for a coal miner B) cancer contracted by workers working with asbestos C) chicken pox that is contracted at work D) exposure to chemicals on the job that lead to cancer
C) chicken pox that is contracted at work
All of the following are 3 separate limits that apply under Part Two of the workers' compensation policy EXCEPT A) policy limit per employee for bodily injury by disease B) policy limit per accident C) policy limit per year for all accidents D) policy limit for all bodily injury claims by disease
C) policy limit per year for all accidents
In states that use the workers' compensation competitive state funds method, all of the following would typically be viable options available to an employer EXCEPT A) purchasing coverage from a private insurance company B) if the employer meets certain criteria, providing coverage through self-insurance C) purchasing coverage from the state fund C) purchasing coverage from the state fund only
C) purchasing coverage from the state fund only
All of the following are benefits specified by workers' compensation laws EXCEPT A) rehabilitation benefits B) medical expenses C) retirement plan contributions D) lost wages
C) retirement plan contributions
Which one the following injuries would qualify as a compensable injury under workers' compensation laws? A) A secretary accidentally swallows his gum while in the company's lunchroom and chokes when it gets lodged in his windpipe B) A hotel maid falls down the stairs while cleaning her own home. C) A nurse gets into an accident and is injured on her daily commute into the hospital. D) A factory worker fractures her arm while working overtime on the assembly line.
D) A factory worker fractures her arm while working overtime on the assembly line.
Which one of the following statements regarding workers' compensation laws is CORRECT? A) Workers' compensation is governed at the federal level. B) An injured worker must prove negligence on the part of the employer. C) Workers' compensation is optional. D) Benefits are paid to workers injured on the job, regardless of who is at fault.
D) Benefits are paid to workers injured on the job, regardless of who is at fault.
Which of following occupations is least likely to be exempt for coverage of workers' compensation laws? A) Charitable organization volunteers B) Casual laborers C) Certain farm and agricultural groups D) High-risk occupations
D) High-risk occupations
Which of these statements regarding workers' compensation benefits is NOT correct? A) Survivor benefits pay a stipulated amount for funeral and burial expenses and a weekly benefit to surviving relatives. B) Rehabilitation benefits cover both medical and vocational rehabilitation. C) Disability benefits are intended to replace a portion los income, but not all of it. D) Payment of medical benefits is very limited in terms of the types of services covered and length of time benefits are paid.
D) Payment of medical benefits is very limited in terms of the types of services covered and length of time benefits are paid.
Which of the following limits does NOT apply to Workers' Compensation Part Two- Employers Liability? A) Policy limit B) Per employee C) Per accident D) Per property damage
D) Per property damage
The Federal Employers' Liability Act (FELA) covers which of the following types of workers? A) Corporate CEOs B) Harbor workers C) Crews on ocean-going vessels D) Railroad employees
D) Railroad employees
Which of the following is a federal law that allows members of a ship's crew to sue the ship owner for injuries caused by the ship owner's negligence? A) Federal Employers Liability Act B) Longshore and Harbor Workers' Compensation Act C) The Ship Act D) The Jones Act
D) The Jones Act
Coverage for workers' compensation may be obtained from all of the following EXCEPT A) the Federal Employers' Liability Act B) self-insurance C) private insurance carriers D) a commercial general liability policy
D) a commercial general liability policy Workers' compensation is provided by the State (monopolistic), private insurance companies, the government, and through self-insurance.
The standard workers' compensation policy imposes all of the following duties on the employer EXCEPT A) provide for immediate medical services as required by law. B) immediately notify the insurance company of a work-related injury C) cooperate with the insurance company D) make voluntary payments to an injured employee.
D) make voluntary payments to an injured employee.
All of the following could create an employers' liability loss EXCEPT A) legal defense costs B) an employee not covered by the workers' compensation law C) lawsuit brought by an injured worker's spouse D) personal injury
D) personal injury Personal injury is not covered under Part Two of the workers' compensation policy. An injury to an employee due to employer negligence in a situation not covered under workers' compensation is covered under employers liability.
Workers' compensation laws cover employees in the course of employment. Some classes of workers, such as domestic servants, are exempt but may be covered by a voluntary compensation endorsement. This endorsement agrees to pay benefits A) only if the employer requests that benefits are paid B) to all employees C) to employees who are exempt only D) to employees not covered or exempt
D) to employees not covered or exempt
Workers' compensation pays A) only when the employer is negligent B) only when another employee is negligent C) only when the employee is at fault D) without regard to fault
D) without regard to fault
Premiums for workers' compensation policies are based upon the A) type of business involved and the number of employees B) type of business involved and the total payroll C) number of employees and the total payroll D) work classification, number of employees, and the total payroll
D) work classification, number of employees, and the total payroll
If an insured has a loss history that is better than average, what will be applied to reduce the workers' compensation premium?
Experience modification factor
In most cases, an injured employee receives payments under workers' compensation insurance from whom?
Insurance company
Joe is the general contractor building a new shopping center. He has hired subcontractors to do some of the work for him. What will cover the employees of the subcontractor if the subcontractor does not take out workers' compensation coverage?
Joe's workers' compensation policy.
Premiums for workers' compensation are based on the amount of payroll and rates established for various occupational classifications set by the
National Council on Compensation Insurance
Which of the following sections of a policy form contains definitions and conditions that apply to the policy as a whole?
The General Section
What is the benefit for the employee covered by either the Federal Employers' Liability Act or the U.S. Longshoremen's and Harbor Workers' Compensation Act?
The benefits are broader than workers' compensation coverage.
When calculating premiums for workers' compensation policy, the insurer will multiply the job classification rate by
The number of $100 payroll units paid to employees in each job classification.
A particular state gives employers the option of purchasing workers' compensation insurance from a state fund or a private company. This is an example of
a competitive state fund
When a policy is written on a reporting basis, a premium is paid at the beginning of the policy period that is based on an estimate of what the final premium will be. This is called
a deposit premium
A certain state requires employers to purchase workers' compensation insurance from a state fund. This is an example of
a monopolistic state fund
The purpose of employers' liability insurance is to provide
liability protection where workers' compensation does not apply
Workers' compensation laws vary from state to state. The categories of coverage are elective or compulsory. In compulsory states, the basic methods of providing coverage are monopolistic or competitive. The monopolistic method is when the insurance
must be purchased from the state-run insurer.
In most states, workers' compensation laws apply
to most workers except those specifically excluded by law.
