CA Workers Compensation

Question 1

All of the following are common-law duties of an employer under a workers’ Compensation policy, EXCEPT:

Answer Choices: Select the Correct Answer
Warn workers of inherent dangers.
Provide a safe working environment.
Assumption of risk.
Provide an adequate number of competent fellow workers.

Answer 1

The correct answer is: Assumption of risk.

EXPLANATION:
Assumption of risk is a common-law defense (not a duty) if a claim is filed. All of the other three answer choices are common-law duties.

Question 2

All of the following are reasonable duties of care that are required of employers with regard to workers’ compensation, EXCEPT:

Answer Choices: Select the Correct Answer
Provide an adequate number of competent employees.
Provide safe tools and equipment to workers.
Warn workers of obvious dangers.
Make and enforce rules for the safety of all workers.

Answer 2

Warn workers of obvious dangers. is correct.

EXPLANATION:
Employers are required to warn workers of INHERENT dangers. In the case of workers compensation coverage, this would mean the employer has the duty to warn workers of the dangers that are a part (inherent) to the job. Employers are not required to point out obvious dangers.

Question 3

Mike’s Moonshine, Inc. is located in a state that permits Mike to decide whether he would like to provide workers’ compensation coverage to his employees or not. Mike lives is a(n):

Answer Choices: Select the Correct Answer
Competitive state.
Elective state.
Obligatory state.
Compulsory state.

Answer 3

Elective state. is correct.

EXPLANATION:
If a state allows an employer to choose not to provide workers’ compensation coverage for its employees, it is known as an “elective” state.

Question 4

On Monday afternoon, Carissa’s boss requested that she finish updating the company website by Tuesday morning. Carissa did not want to stay at the office late into the evening so she took her work home to complete it there. On the way home, Carissa remembers that she left an external hard drive back at the office. This hard drive contained files that she needed to complete the website updates so she turns her car around and heads back to the office to retrieve it. Two blocks away from her office, another car runs a stop light and smashes into Carissa’s car, severely injuring her. Which of the following statements would be TRUE in how Carissa would be handled by her employer’s workers compensation coverage?

Answer Choices: Select the Correct Answer
Carissa’s injuries are not compensable because she contributed to her injuries by forgetting the hard drive.
Carissa’s injuries are compensable because she was driving to retrieve a work-related item.
Carissa’s injuries are not compensable as she was commuting to work and coverage does not apply in that case.
Carissa’s injuries are compensable because she was technically “at work”, she was simply taking work home.

Answer 4

The correct answer is: Carissa’s injuries are not compensable as she was commuting to work and coverage does not apply in that case.

EXPLANATION:
Workers’ compensation laws do not apply to employees when they are commuting to and from work.

Question 5

When a state is “monopolistic” with workers’ compensation coverage, employers in that state are:

Answer Choices: Select the Correct Answer
Permitted to purchase coverage through a private insurer or through the state-funded plan.
Required to purchase their workers’ compensation coverage from the state-funded plan.
Required to self-insure their workers’ compensation coverage.
Not required to provide workers’ compensation coverage for their employees.

Answer 5

Required to purchase their workers’ compensation coverage from the state-funded plan. is correct.

EXPLANATION:
In a monopolistic state, the state writes all of the coverage (except those that are self-insured) and private insurers are not permitted to provide coverage.

Question 6

In most states, workers’ compensation laws apply:

Answer Choices: Select the Correct Answer
Only to workers in occupations that are considered extremely hazardous.
To most workers except those specifically excluded by state statute.
To full-time workers only.
Only to workers in occupations that are considered very low risk.

Answer 6

To most workers except those specifically excluded by state statute. is correct.

EXPLANATION:
State statutes determine the types of employments are required to cover employees for workers’ compensation.

Question 7

With regard to workers’ compensation coverage, a “competitive” state is:

Answer Choices: Select the Correct Answer
One where both private and government insurers write workers’ compensation policies, but the government premium rates remain the lowest and most competitive.
One where the state government provides all workers’ compensation policies, but there are enough different coverage choices within the program to be competitive.
One where both private and government insurers write workers’ compensation policies that compete against one another.
One where the law requires a large enough number of workers’ compensation carriers be granted a certificate of authority to write coverage so that it keeps the premium rates at a low, competitive rate.

Answer 7

One where both private and government insurers write workers’ compensation policies that compete against one another. is correct.

EXPLANATION:
A “competitive” state is one where both private and government insurers write workers’ compensation policies that compete against one another.

Question 8

Which of the following is NOT a method of determining causation of injuries under a workers’ compensation claim?

Answer Choices: Select the Correct Answer
Determining if the injury or illness arose in the course of the employment.
Determining if the injury or illness arose out of the employment.
Determining the proximate cause of the injury or illness.
Determining if the injured worker was performing duties that he or she was authorized to perform.

Answer 8

Determining the proximate cause of the injury or illness. is correct.

EXPLANATION:
The tort law concept of proximate cause is beneficial in proving “fault” in relationship to an accident or injury. Workers’ compensation is “no-fault” coverage, therefore “proximate cause” is not a concern under a workers’ compensation claim.

Question 9

All of the following are benefits paid under workers compensation insurance, EXCEPT:

Answer Choices: Select the Correct Answer
Permanent partial disability.
Permanent total disability.
Total partial disability.
Temporary total disability.

Answer 9

Total partial disability. is correct.

EXPLANATION:
There is not a workers’ compensation benefit category known as “total partial disability”.

Question 10

The workers’ compensation plan covering land-based maritime workers is called:

Answer Choices: Select the Correct Answer
U.S. Longshore and Harbor Workers’ Compensation Act.
The Jones Act.
The Federal Employers Liability Act.
The Federal Employees Compensation Act.

Answer 10

U.S. Longshore and Harbor Workers’ Compensation Act. is correct.

EXPLANATION:
Those who load, unload, build and repair ships are covered by the U.S. Longshore and Harbor Workers’ Compensation Act. The key word in the question was “land-based.” Maritime workers in the navigable waters of the United States would also be covered by this Act. Maritime workers on ships beyond the navigable waters of the U.S. would be covered by the Jones Act.

Question 11

With a work-related injury, the loss of a finger would be characterized as what type of disability?

Answer Choices: Select the Correct Answer
Permanent total disability.
Permanent partial disability.
Temporary total disability.
Temporary partial disability.

Answer 11

Permanent partial disability. is correct.

EXPLANATION:
Loss of a finger or limb is defined as a permanent partial injury, and this characterization is used for the establishment of disability benefits to the injured employee.

Question 12

With regard to workers’ compensation insurance, a “retroactive period” is:

Answer Choices: Select the Correct Answer
Another name for a waiting period.
The period in which a workers’ compensation policy is in effect.
A provision required by the federal government to be included in all workers’ compensation policies.
A specified number of days of disability after which compensation will be paid for each day since the date of the injury.

Answer 12

A specified number of days of disability after which compensation will be paid for each day since the date of the injury. is correct.

EXPLANATION:
With regard to workers’ compensation insurance, a “retroactive period” is a specified number of days of disability after which compensation will be paid for each day since the date of the injury.

Question 13

Which of the following is NOT covered by the Federal Employee’s Compensation Act (FECA)?

Answer Choices: Select the Correct Answer
Lost wages.
Damages awarded by a court.
Vocational rehabilitation benefits.
Medical benefits.

Answer 13

Damages awarded by a court. is correct.

EXPLANATION:
Workers’ compensation benefits are provided in exchange for the insured’s right to sue. Damages are awarded if the insured sues, therefore this would be the benefits NOT covered by FECA.

Question 14

Which of the following workers’ compensation scheduled disability classifications would allow the injured worker to perform “light duty” work while recovering?

Answer Choices: Select the Correct Answer
Temporary partial disability.
Permanent partial disability.
Temporary total disability.
Permanent total disability.

Answer 14

Temporary partial disability. is correct.

EXPLANATION:
When a worker is classified as having a temporary partial disability, they can perform “light duty” work while recovering.

Question 15

The most common method used by employers to obtain workers’ compensation coverage is:

Answer Choices: Select the Correct Answer
Through private insurers.
Through self-insurance.
Through a state-run residual market plan.
Through an employee contribution group.

Answer 15

Through private insurers. is correct.

EXPLANATION:
The most common method used by employers to obtain workers’ compensation coverage is through private insurance companies.

Question 16

Typical state workers’ compensation laws stipulate that the amount of weekly disability benefits paid for a temporary disability is determined by:

Answer Choices: Select the Correct Answer
A schedule of benefits that lists amounts based on specific types of injuries.
Applying a nationally mandated percentage to the employee’s average weekly wage.
The severity of the injury that is determined by a schedule.
Applying a state mandated percentage to the employee’s average weekly wage.

Answer 16

Applying a state mandated percentage to the employee’s average weekly wage. is correct.

EXPLANATION:
Weekly disability benefits under workers’ compensation are paid by applying the state mandated percentage the employee’s average weekly wage.

Question 17

The Jones Act allows the crew of a ship to sue their employer for negligence that results in injury or death using the:

Answer Choices: Select the Correct Answer
Modified comparative negligence standard.
Contributory negligence standard.
Comparative negligence standard.
Modified contributory negligence standard.

Answer 17

Comparative negligence standard. is correct.

EXPLANATION:
The Jones Act uses the comparative negligence standard.

Question 18

When an employer self-insures their workers’ compensation risks, but would like to purchase insurance to cover claims that may exhaust their self-insured limits, what coverage should be purchased?

Answer Choices: Select the Correct Answer
Excess coverage.
Catastrophic coverage.
Umbrella coverage.
A surety bond.

Answer 18

The correct answer is: Excess coverage.

EXPLANATION:
Excess coverage should be purchased by a self-insured workers compensation plan to cover claims in excess of the self-insured limits of coverage.

Question 19

Victoria was injured on the job in a state with the following workers’ compensation regulations:

• The waiting period is 3 days.
• The retroactive period is 7 days.

Victoria was injured and returned to work on the 14th day following the injury. How many days of benefits will Victoria receive?

Answer Choices: Select the Correct Answer
14 days.
6 days.
7 days.
13 days.

Answer 19

13 days. is correct.

EXPLANATION:
Because Victoria’s injury did not permit her to return to work until after the retroactive period, she will be paid back to the first day of her injury. She is not paid for the 14th day, because she’s back and work and will be earning wages that day.

Question 20

Generally, employers have three methods of obtaining workers’ compensation coverage. Which of the following is NOT one of those methods?

Answer Choices: Select the Correct Answer
Purchasing from a private or a state-run insurance company.
Self-insuring for workers’ compensation.
Purchasing from a state-run residual market plan.
Creating a plan where employees pay the premium on workers’ compensation for the group.

Answer 20

Creating a plan where employees pay the premium on workers’ compensation for the group. is correct.

EXPLANATION:
Employees do not pay for workers’ compensation coverage. Only employers pay the premiums on residual market coverage, private or state-run insurance, or they can self-insure without contribution from the employees.

Question 21

To be covered under a workers’ compensation policy, the last exposure to the conditions causing bodily injury by disease must occur:

Answer Choices: Select the Correct Answer
During the most recent term of employment.
Within the policy period.
During the last day of employment.
During normal working hours, excluding overtime.

Answer 21

Within the policy period. is correct.

EXPLANATION:
The policy which was in force during the last exposure to the disease-causing conditions is the one which responds for the payment of any applicable benefits.

Question 22

Under a standardized NCCI workers’ compensation policy, the insurance company will pay to the insured, as part of any claim, proceeding, or suit defended, all of the following expenses, EXCEPT:

Answer Choices: Select the Correct Answer
Interest on judgments.
Travel expenses to testify, at the request of the insurance company.
All expenses incurred by the insurance company.
Loss of earnings.

Answer 22

Loss of earnings. is correct.

EXPLANATION:
The insurance company will NOT pay the insured for the loss of earnings that may result from the time they take away from work to assist the insurer to defend them against a lawsuit.

Question 23

Part One of a standard workers’ compensation policy states that the insurer agrees to defend at its expense any claim, proceeding or lawsuit against the insured employer:

Answer Choices: Select the Correct Answer
Regardless of coverage.
Related to any workers’ compensation benefit.
For benefits payable by the insurer.
Related to any employers liability benefits.

Answer 23

The correct answer is: For benefits payable by the insurer.

EXPLANATION:
The insurer will defend and incur all expenses associated with that defense for claims, proceedings or law suits against the employed insurer, but only for benefits that the insurer would be obligated to pay under the policy.

Question 24

All of the following statements are TRUE of the terms used in the standard workers’ compensation policy, EXCEPT:

Answer Choices: Select the Correct Answer
“The Policy” means the Information page and all endorsements and schedules listed there.
“Locations” means all the workplaces listed on the Information page.
“State” means any state of the United States, the District of Columbia, and all territories and possessions.
“The Insured” is the employer named in item 1 of the Information page.

Answer 24

“State” means any state of the United States, the District of Columbia, and all territories and possessions. is correct.

EXPLANATION:
When the term “state” is used in the standard workers’ compensation policy, it means any state of the United States, the District of Columbia. It DOES NOT refer to United States territories and possessions.

Question 25

Employers are responsible to make payments to the injured worker, in excess of the benefits regularly provided by workers’ compensation law for all of the following, EXCEPT:

Answer Choices: Select the Correct Answer
Knowingly employing a worker illegally.
Failing to comply with a health or safety law or regulation.
If the employer contributed to the injury in any way.
Discharging or discriminating against any employee in violation of workers’ compensation law.

Answer 25

The correct answer is: If the employer contributed to the injury in any way.

EXPLANATION:
The employer is only required to make payments in excess of the no-fault benefits workers’ compensation coverage provides if they have committed serious and willful misconduct. Therefore, the answer choice that would NOT be correct is “If the employer contributed to the injury in any way”.

Question 26

With workers’ compensation insurance, the insurer is considered to have received notice of a claim:

Answer Choices: Select the Correct Answer
When the employee informs the insurer.
On the day the insurer receives notice of the claim by certified mail.
When the employer has notice of the claim.
When the employer informs the insurer.

Answer 26

The correct answer is: When the employer has notice of the claim.

EXPLANATION:
The insurer is considered to have notice of a claim at the moment the employer has notice. An injured employee has no duty to inform the insurer. The employer is required to promptly file a claim with its insurer when it has notice of a workplace accident.

Question 27

All of the following are exceptions to the workers’ compensation exclusive remedy, EXCEPT:

Answer Choices: Select the Correct Answer
Failure of the employer to provide benefits.
Third-party-over actions.
An on-the-job injury caused by worker fatigue from working an excessive number of over-time hours.
The fellow worker doctrine.

Answer 27

An on-the-job injury caused by worker fatigue from working an excessive number of over-time hours. is correct.

EXPLANATION:
An on-the-job injury would be covered, whether or not it was caused by worker fatigue. All of the other answer choices are exceptions to the exclusive remedy provided by workers’ compensation.

Question 28

What is the purpose of the “Other States” coverage of a standard workers’ compensation policy?

Answer Choices: Select the Correct Answer
To provide automatic coverage in states not listed on the policy for Part One coverage.
To provide coverage in one or more of the “competitive” states.
To provide blanket coverage in any other state in which the insured may operate.
To provide coverage in one or more of the “monopolistic” states.

Answer 28

The correct answer is: To provide automatic coverage in states not listed on the policy for Part One coverage.

EXPLANATION:
The “Other States” coverage applies to both Workers Compensation and Employers Liability coverage under a Workers Compensation policy. The purpose is to provide automatic coverage for states listed in Part Three - Other States if those states are not listed on the policy for Part One coverage. When the insured begins operation in those states listed in Part Three, employees will be covered as if that state was listed in Part One.

Question 29

Willie’s Widgets carries two separate policies to provide Employers Liability coverage. When Willie’s is sued by an employee for an injury not covered by state workers’ compensation statutes, how will the claim be settled?

Answer Choices: Select the Correct Answer
By using the contribution by equal shares method.
By using the pro rata share method.
By having the policy that was purchased first pay up to its limit and the second policy that was purchased later pay any remaining balance.
By having the primary policy pay first and the excess policy pay only after the primary policy’s limit of liability is reached.

Answer 29

By using the contribution by equal shares method. is correct.

EXPLANATION:
The Employers Liability coverage specifies that claims are settled using the “contribution by equal shares” method. To review how this method works, go back to Insurance Fundamentals – Module C.

Question 30

Which of the following is the basic minimum (standard) limit for bodily injury by accident under Part Two: Employer’s Liability?

Answer Choices: Select the Correct Answer
$500,000.
$250,000.
$300,000.
$100,000.

Answer 30

$100,000. is correct.

EXPLANATION:
The “basic”, “standard”, or “minimum” limit for bodily injury by accident under Part Two: Employer’s Liability of a workers’ compensation policy is $100,000.

Question 31

The Voluntary Compensation endorsement to a workers’ compensation policy:

Answer Choices: Select the Correct Answer
Is required to be purchased by employers who have less than 10 employees.
Can be purchased by an employer on a voluntary basis to provide additional indemnity benefits above the maximum state average weekly wage.
May be purchased by an employer on a voluntary basis to provide additional indemnity benefits above the minimum state average weekly wage.
Provides coverage for volunteers or other workers’ who are not covered by statutory workers’ compensation benefits.

Answer 31

Provides coverage for volunteers or other workers’ who are not covered by statutory workers’ compensation benefits. is correct.

EXPLANATION:
The Voluntary Compensation endorsement to a workers’ compensation policy provides coverage for volunteers or other workers’ who are not covered by statutory workers’ compensation benefits.

Question 32

The part of a standard workers’ compensation policy that contains the cancellation procedures is:

Answer Choices: Select the Correct Answer
Part One - Workers Compensation
Part Two - Employers Liability
Part Five - Premium
Part Six - Conditions

Answer 32

Part Six - Conditions is correct.

EXPLANATION:
Part Six - Conditions spells out the cancellation procedures.

Question 33

Which of the following statements best describes a “third-party-over action” in workers’ compensation insurance?

Answer Choices: Select the Correct Answer
Damages the employer wins in court from a manufacturer due to malfunctioning equipment that injures employees.
Damages for which the employer is legally liable to pay, that are won from a third party by an injured worker. Then, the third party sues the employer.
Damages sustained by a third party while on the insured location.
Damages a manufacturer seeks from an employer for damage to their reputation when an employee misuses their equipment due to an employer not providing proper training.

Answer 33

The correct answer is: Damages for which the employer is legally liable to pay, that are won from a third party by an injured worker. Then, the third party sues the employer.

EXPLANATION:
A third-party-over action occurs when an injured worker sues a third party for injuries sustained on the job, then the third party sues the employer to recoup the damages paid to the injured worker.

Question 34

Which part of a Workers’ Compensation & Employers Liability policy explains how the cost of the policy is calculated?

Answer Choices: Select the Correct Answer
Part Two.
Part Three.
Part Four.
Part Five.

Answer 34

Part Five. is correct.

EXPLANATION:
Part Five explains how the premium (cost) of the policy is calculated.

Question 35

All of the following are exclusions under the “Part Two - Employer’s Liability” section of the standard workers’ compensation policy, EXCEPT:

Answer Choices: Select the Correct Answer
Bodily injury to an employee who was illegally employed.
Bodily injury occurring outside of the United States, its territories and Canada.
A bodily injury claim submitted by an employee for an injury that occurred during the policy period and was due to the employment.
A bodily injury claim submitted by an employee for an injury that was intentionally caused or aggravated by the covered employer.

Answer 35

A bodily injury claim submitted by an employee for an injury that occurred during the policy period and was due to the employment. is correct.

EXPLANATION:
The only answer choice that describes a scenario where the claim would NOT be excluded is: “A bodily injury claim submitted by an employee for an injury that occurred during the policy period and was due to the employment.” All of the other answer choices are specifically excluded under Part Two of the standard workers’ compensation policy.

Question 36

With regard to workers’ compensation insurance, the term “willful” means which of the following?

Answer Choices: Select the Correct Answer
Unsupervised.
Negligent.
With good reason.
Intentional.

Answer 36

Intentional. is correct.

EXPLANATION:
The terms “willful” and “intentional” are synonymous.

Question 37

Under the workers’ compensation laws of California, permanent total disability is rated at which of the following percentages?

Answer Choices: Select the Correct Answer
50%.
60%.
90%.
100%.

Answer 37

100%. is correct.

EXPLANATION:
Permanent total disability is rated at 100% in California.

Question 38

The California Workers’ Compensation law is:

Answer Choices: Select the Correct Answer
Competitive.
Elective.
Obligatory.
Compulsory.

Answer 38

Compulsory. is correct.

EXPLANATION:
The California Workers’ Compensation law is compulsory.

Question 39

In California, when employers offer twenty-four hour coverage for their employees, this could include all of the following, EXCEPT:

Answer Choices: Select the Correct Answer
Disability coverage for non-occupational injuries.
Life insurance for non-occupational death of the employee.
Health insurance for non-occupational diseases.
Workers compensation coverage for occupational injures and diseases.

Answer 39

The correct answer is: Life insurance for non-occupational death of the employee.

EXPLANATION:
Life insurance is not included in twenty-four hour coverage that can combine workers’ compensation coverage with health and disability insurance to cover the employee for both occupational and non-occupational injuries and illness and other health care services.

Question 40

Under California workers’ compensation laws and regulations, an employee who suffers a work-related accident and loses 95% use of an arm would be eligible for what type of disability rating?

Answer Choices: Select the Correct Answer
Temporary partial.
Temporary total.
Permanent partial.
Permanent total.

Answer 40

Permanent partial. is correct.

EXPLANATION:
A rating between 1% and 99% indicates a permanent partial disability.

Question 41

If an employee in California suffers an “at work” injury or illness, they are entitled to ______ % of their average weekly wage.

Answer Choices: Select the Correct Answer
66 2/3
70
75
63 2/3

Answer 41

66 2/3 is correct.

EXPLANATION:
The employee is entitled to 66 2/3% of their average weekly wage as a result of a job-related injury or illness.

Question 42

Ron’s Body Shop hires Bob as a painter. Bob is, unbeknownst to his employer, suffering from respiratory disease caused by spray-painting over the past 10 years and two prior jobs. Bob’s condition worsens as he works for Ron and 18 months later he becomes very ill. What degree of workers’ compensation exposure would Ron’s Body Shop have?

Answer Choices: Select the Correct Answer
No responsibility as Bob’s disease is a pre-existing condition
A shared portion of liability with all Bob’s previous employers
Full responsibility because Ron allowed Bob to work in a dangerous environment
Full responsibility because Bob has worked for Ron for 18 months.

Answer 42

Full responsibility because Bob has worked for Ron for 18 months. is correct.

EXPLANATION:
Responsibility for workers’ compensation benefits for occupational diseases is apportioned to all of a worker’s employers during the last year which exposed the worker to the hazards associated with the occupational disease. Employers beyond one year in the past are absolved of responsibility to pay workers’ compensation benefits.

Question 43

Which of the following is NOT a true statement regarding workers’ compensation coverage in California?

Answer Choices: Select the Correct Answer
First aid treatment is not covered under workers’ compensation coverage.
If an employee is under 16 years of age at the time of injury, disability benefits that the employee becomes eligible for are to be paid at a rate 50% higher than normal.
The waiting period for disability benefits is three days.
Medical benefits provide unlimited coverage with no dollar limitation.

Answer 43

The correct answer is: First aid treatment is not covered under workers’ compensation coverage.

EXPLANATION:
First aid treatment is covered under workers’ compensation coverage, it is not excluded.

Question 44

An individual employed by an employer based in California is working temporarily in a state other than California and suffers an injury. This individual is:

Answer Choices: Select the Correct Answer
Covered under the workers compensation fund of the other state where he was working.
Not covered.
Covered equally under California and the other state’s workers compensation fund.
Covered under California’s workers compensation fund.

Answer 44

Covered under California’s workers compensation fund. is correct.

EXPLANATION:
The California Workers’ Compensation Fund may also cover a California employer against liability for workers’ compensation benefits under the laws of any other state for California employees temporarily working outside California on a specific job assignment if the Fund insures the other employees that work within California.

Question 45

In California, in which of the following cases would an injured employee collect disability compensation from the date of injury?

Answer Choices: Select the Correct Answer
If the employee is off work for 5 days.
If the employee is off work for 7 days.
If the employee is off work for 10 days.
If the employee is hospitalized as an inpatient.

Answer 45

If the employee is hospitalized as an inpatient. is correct.

EXPLANATION:
Disability benefits accrue to an injured employee from the date that the injury occurred if the accident caused him/her to be transported to and admitted to a hospital.