Ch. 8 - Workers Compensation Insurance

Question 1

What are the 2 main parts of workers compensation insurance?

Answer 1

Part I: Workers Compensation

Part II: Employers Liability

Question 2

What is the primary purpose of Workers Compensation Insurance?

Answer 2

To pay benefits to employees for injuries arising out of employment.

Question 3

What does exclusive remedy mean?

Answer 3

Injured employees cannot seek damages outside workers compensation.

Question 4

What is the difference between a monopolistic state fund and a competitive market?

Answer 4

In a monopolistic state fund, employers are required to purchase workers comp insurance from a state operated entity. In a competitive market, workers comp is purchased by employers from insurers authorized to write casualty insurance.

Question 5

What are the 4 types of benefits provided by Workers Comp insurance?

Answer 5

1. Medical payments
2. Disability income
3. Rehabilitation expenses
4. Death benefits

Question 6

What is a second injury fund?

Answer 6

A workers comp program design to pay for any additional benefits when an employee with a previous injury suffers a second injury.

Question 7

What is the purpose of employers liability insurance?

Answer 7

To protect the insured from situations that are not covered under a state’s workers comp law.