Question 1

What is the AOE/COE standard, and why is it the central legal test in workers compensation?

Accepted Answer

AOE/COE means the injury must 'arise out of' (caused by a work-related risk) AND occur 'in the course of' employment (during work time and place). Both prongs must be satisfied for an injury to be compensable under workers compensation.

Question 2

What are the characteristics of medical benefits under a standard workers compensation policy?

Accepted Answer

Medical benefits under workers compensation are generally unlimited in dollar amount and duration, covering all reasonable and necessary medical treatment related to the work injury. Depending on the jurisdiction, the employer or insurer may direct care (employer-directed) or the employee may choose their own treating physician.

Question 3

What is covered under Part One of a standard workers compensation policy, and does it have a dollar limit?

Accepted Answer

Part One — Workers Compensation Insurance — pays all benefits the employer is legally obligated to provide under the applicable workers compensation statute, with no dollar limit on the insurer's obligation. The insurer essentially steps in and pays whatever the law requires on behalf of the employer.

Question 4

What is the exclusive remedy doctrine in workers compensation, and what does the employee give up?

Accepted Answer

The exclusive remedy doctrine provides that workers compensation is the sole remedy available to an injured employee against their employer, meaning the employee cannot sue the employer in civil court for negligence. In exchange, the employee receives guaranteed no-fault benefits regardless of who caused the injury, eliminating the need to prove employer fault.

Question 5

What penalties can an employer face for failing to carry required workers compensation insurance?

Accepted Answer

Employers who fail to carry required workers compensation insurance can face severe penalties including fines, stop-work orders forcing the business to cease operations, personal liability for all injured employees' benefits, and criminal charges in some jurisdictions. The employer loses the protection of the exclusive remedy doctrine and can be sued in civil court by injured workers.

Property and Casualty Insurance License Exam — Workers Compensation

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