Georgia Property & Casualty Practice Exam

What is the primary purpose of Part One in a standard workers compensation policy?

1. A.) To provide coverage for employer liability claims

2. B.) To provide insurance for additional states

3. C.) To cover statutory benefits under specified laws

4. D.) To outline procedures after an injury occurs

The correct answer is: C.) To cover statutory benefits under specified laws

The primary purpose of Part One in a standard workers' compensation policy is to cover statutory benefits as mandated by applicable workers' compensation laws. This section specifically addresses the insurance company's obligation to pay for medical expenses, disability benefits, rehabilitation costs, and other compensation that the law requires when an employee is injured or becomes ill as a result of their job. Part One ensures that employers comply with mandated state laws designed to protect workers, reflecting the legal requirement for employers to provide this essential coverage. In contrast, while other parts have their own functions—such as providing employer liability coverage, extending insurance to additional states, or outlining procedures post-injury—those purposes are secondary to the foundational role of Part One in fulfilling legal obligations and ensuring that injured workers receive the benefits they need. Thus, focusing on the statutory nature of the benefits provided is crucial to understanding the primary function of this part of the policy.