Chapter 13 Insurance for Employees and Professionals Flashcards Preview

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Flashcards in Chapter 13 Insurance for Employees and Professionals Deck (25)
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1

After spending an afternoon moving boxes from one storage area to another, an office employee complains of muscle and lower back pain. The worker files a workers' compensation claim. The company's standard policy will most likely:

a. cover the employer's liability for the injury
b. cover only the employee's medical payments
c. not cover the employee because he is an office employee
d. not cover the claim because the injury occurred outside the employee's regular scope of work

a. cover the employer's liability for the injury

2

Georgina's 401(k) plan is a type of:

a. ERISA plan
b. profit-sharing plan
c. group thrift or savings plan
d. defined benefits plan

c. group thrift or savings plan

3

Explain the purpose of a group thrift/savings plan.

They allow the employee to contribute part of their salary to an employer sponsored savings plan

4

Plans that specify the amount of the periodic payments to the plan, but not the amount of retirement benefits the plan will provide, are called:

a. defined contribution plans.

b. defined benefit plans.

c. pension plans.

d. tracked payment plans

a. defined contribution plans.

5

All of the following would be covered under employers' liability insurance EXCEPT:

a. an employee claim for injuries at work resulting from doing a specific task required by the job.
b. a claim made by an employee's spouse for lost affections because of an employment related injury
c. a third-party claim where an outside manufacturer who was sued by an injured employee files suit because allowed safety features to be removed
d. an employee claim for injuries at work caused in a manner not covered under the worker's compensation policy

a. an employee claim for injuries at work resulting from doing a specific task required by the job.

6

What is the experience modification factor?

an adjustment applied to a workers' compensation premium that reflects the insured's past loss history

7

What categories of employees are generally not covered by workers' compensation insurance?

proprietors in a proprietorship and partners in a partnership

agricultural employees and domestic workers

longshoreman and other employees on navigable waters

8

What is the Employee Retirement Income Security Act of 1974?

A law that lays out the parameters that pension plans must observe. They dictate when employees must become eligible for pensions and over what period of time their pension becomes vested.

9

An employee is fired and then files a lawsuit claiming that he was wrongfully terminated because of his age. Which type of professional liability insurance provides the business coverage for this type of exposure?

a. employee benefit liability insurance
b. fiduciary liability insurance
c. employment practices liability insurance
d. directors' and officers' liability insurance

c. employment practices liability insurance

10

What is the purpose of ERISA?

a. to make it easier to get employment practices liability insurance

b. to guarantee directors' and officers' liability insurance

c. to explain the regulations of health savings accounts

d. to lay out the parameters that a pension plan must observe

d. to lay out the parameters that a pension plan must observe

11

For Martine to qualify for worker's compensation coverage, she had to meet two conditions. Which of the following represent those two conditions?

a. injury by accident that occurred during the policy period; condition was aggravated while working at home
b. injury by accident that occurred during the policy period; last day of exposure to the conditions causing the injury during the policy period
c. employee on navigable waters; last day of exposure to the conditions causing the injury occurred during the policy period
d. injury by accident occurred on the way to work; injury prevented her from getting to work on the day of the accidental injury

b. injury by accident that occurred during the policy period; last day of exposure to the conditions causing the injury during the policy period

12

What is retrospective rating?

A rating plan in which a business estimates its projected losses and pays an estimated premium or deposit; then later pays a premium based on the actual losses the business sustains during the policy period.

13

Deductibles and coinsurance percentages _______ medical policies and to policies for property and casualty insurance.

a. do not apply to
b. apply very differently to
c. apply in the same way to
d. always apply per occurrence to

b. apply very differently to

14

Claims involving the administration of employee benefit plans are generally plans are generally covered if they involve all of the following except:

a. interpreting employee benefit programs
b. handling records in connection with employee benefit programs.
c. handling losses relating to breach of fiduciary responsibility
d. effecting enrollment, termination, or cancellation under employee benefit programs

c. handling losses relating to breach of fiduciary responsibility

15

For insured that have been in business for a few years and are of a certain minimum premium size, which of these may apply?

a. minimum experience factor
b. legal liability factor
c. regulatory factor
d. experience modification factor

d. experience modification factor

16

Acme Holdings was being sued for issues surrounding allegations of wrongful discipline and discrimination in promotion practices. Fortunately, ACME had _________, which served for these types of claims.

a. employment practices liability insurance
b. directors' and officers' liability insurance
c. fiduciary liability insurance
d. professional liability insurance

a. employment practices liability insurance

17

What is employee benefits liability insurance?

insurance coverage for claims involving the administration of employee benefit plans

18

What is a comprehensive major medical plan?

Standard comprehensive group health plan under-written by insurance companies or by Blue Cross and Blue Shield Associations. These plans usually set deductibles, coinsurance, out-of-pocket maximums, and overall maximum coverage limits

19

________ provides medical and compensation benefits to employees with a work-related illness or injury.

a. Workers' compensation insurance
b. Employers' liability insurance
c. Professional liability insurance
d. Fiduciary liability insurance

a. Workers' compensation insurance

20

What is the purpose of workers' compensation insurance?

It provides medical and compensation benefits to employees with a work-related illness or injury.

21

What are some characteristics that apply to defined contribution pensions plans?

they specify the amount of the periodic contribution but not the amount of retirement benefits that the plan will provide. it is easier to administer.

22

Which type of plan rewards the employer for good loss experience and penalizes it for poor loss experience?

a. employee benefits plan
b. loss retention plan
c. retrospective rating plan
d. profit-sharing plan

c. retrospective rating plan

23

Depending on the state, proprietors in a proprietorship and partners in a partnership________, unless they specifically elect to come under the workers' compensation law.

a. will always be covered
b. may not be covered
c. will be liable
d. may not be liable

b. may not be covered

24

The purpose of workers' compensation insurance is to:

a. cover liability and benefits claims made by an employee or related third parties against the employer.
b. cover the damages an employee incurs due to an illness or accident that arises out of employment
c.cover liability lawsuits filed by the families of employees who are injured on the job.
d. protect the employee from being injured or killed on the job

b. cover the damages an employee incurs due to an illness or accident that arises out of employment

25

What are four exclusions to workers' compensation insurance?

liability assumed under a contract

punitive or exemplary damages because of bodily injury to a person employed in violation of the law

bodily injury intentional caused or aggravated by the insured

damages arising out of the discharge of, coercion of, or discrimination against any employee in violation of the law