California Property & Casualty Broker-AgentCasualty InsuranceMedium
A California employer is required to provide Workers' Compensation insurance. An employee sustains a work-related injury that results in a permanent impairment, but they are still able to return to work in a modified capacity. Which type of Workers' Compensation benefit would typically address the loss of earning capacity due to this permanent impairment?
- APermanent Partial Disability (PPD)
- BMedical Benefits
- CDeath Benefits
- DTemporary Total Disability (TTD)
Show answer & explanationAnswer & explanation
Correct answer: A. Permanent Partial Disability (PPD)
Permanent Partial Disability (PPD) benefits are paid when an employee sustains a permanent impairment from a work injury, but the impairment is not so severe as to prevent them from returning to some form of work. These benefits compensate for the estimated loss of future earning capacity.
Why the other options are wrong
- B. Medical benefits cover the cost of treatment for the injury, not the loss of earning capacity.
- C. Death benefits are paid to dependents if a work injury results in the employee's death.
- D. TTD benefits are for when an employee is temporarily unable to work due to an injury, not for permanent impairment.
Permanent Partial Disability (PPD)
Permanent Partial Disability (PPD) benefits in Workers' Compensation compensate an injured employee for the loss of future earning capacity due to a permanent impairment that does not completely prevent them from working.
- Paid after maximum medical improvement (MMI).
- Based on a disability rating.
- Compensates for reduced ability to compete in the labor market.
Memory trick: Temporary takes you out, Permanent partially puts you back.