Property & Casualty Insurance Exam (National Portion)Types of PoliciesEasy
An employee suffers a work-related injury, resulting in temporary disability and requiring medical treatment. The employer's Workers' Compensation policy will cover the employee's medical expenses and lost wages. Under which part of the Workers' Compensation and Employers Liability Policy would these benefits primarily fall?
- APart Four - Your Duties If Injury Occurs
- BPart Three - Other States Insurance
- CPart Two - Employers Liability Insurance
- DPart One - Workers' Compensation Insurance
Show answer & explanationAnswer & explanation
Correct answer: D. Part One - Workers' Compensation Insurance
Part One of the Workers' Compensation and Employers Liability Policy specifically covers the statutory obligations of the employer under the Workers' Compensation laws, which include paying for an injured employee's medical expenses and lost wages (disability benefits) regardless of fault.
Why the other options are wrong
- A. Part Four outlines the responsibilities of the insured employer in the event of an injury, such as providing notice to the insurer, not the benefits themselves.
- B. Part Three extends coverage to other states where the employer's operations might expose them to workers' compensation laws.
- C. Part Two covers the employer's legal liability for work-related injuries that fall outside of the workers' compensation statute, such as lawsuits by employees for negligence (e.g., loss of consortium, dual capacity claims).
Workers' Compensation Policy Part One
The section of a Workers' Compensation and Employers Liability Policy that covers the employer's statutory obligations to pay for an employee's work-related injuries or illnesses as mandated by state law.
- Provides medical benefits, disability benefits (lost wages), rehabilitation, and death benefits.
- Coverage is 'no-fault', meaning benefits are paid regardless of who caused the injury.
- Adheres to the specific workers' compensation laws of the state(s) where employees are covered.
Memory trick: Part 1 is for Worker's Benefits, Part 2 for Employer's Lawsuits.