New Hampshire Property & Casualty Insurance License Exam — All Questions

Workers compensation insurance operates on the principle that benefits for a covered work-related injury are paid:

• a.Only if the employer is proven negligent
• b.Only if the employee files a lawsuit
• c.On a no-fault basis, regardless of who was at fault✓
• d.Only for injuries occurring away from work

Workers compensation is a no-fault system: an employee injured in the course and scope of employment receives statutory benefits regardless of who was at fault, and in exchange generally gives up the right to sue the employer. This trade-off provides prompt, predictable benefits to workers while limiting employers' liability. The concept is uniform nationwide, even though specific benefit amounts are set by each state.

Which of the following benefits is NOT typically provided by workers compensation insurance?

• a.Medical care for the work injury
• b.Compensation for the employee's pain and suffering✓
• c.Partial wage replacement during disability
• d.Death benefits to surviving dependents

Workers compensation provides defined benefits: medical treatment for the work injury, partial wage replacement during disability, rehabilitation, and death benefits to dependents. It generally does not pay for pain and suffering, which are non-economic damages available through lawsuits. Because workers comp is a no-fault statutory system, benefits are limited to these scheduled categories rather than open-ended tort damages.

Under a Workers Compensation and Employers Liability policy, Part Two (Employers Liability) is intended to:

• a.Pay statutory workers comp benefits directly
• b.Cover the employee's health insurance premiums
• c.Provide auto liability for company vehicles
• d.Cover the employer against certain work-injury lawsuits not covered by statutory benefits✓

Part One of the policy pays the statutory workers compensation benefits an employer owes by law. Part Two, Employers Liability, protects the employer against certain lawsuits related to workplace injuries that fall outside the exclusive-remedy workers comp system, such as third-party-over actions. Health premiums and auto liability are covered under entirely different policies.