Alabama Property and Casualty Practice Exam

Which of the following is a major purpose of Workers Compensation insurance?

1. To provide financial assistance for uninsured motorists

2. To ensure employees receive medical care and wage replacement after work-related injuries

3. To protect businesses from liability suits

4. To encourage workplace accidents

The correct answer is: To ensure employees receive medical care and wage replacement after work-related injuries

Workers Compensation insurance is primarily designed to ensure that employees receive necessary medical care and wage replacement in the event of work-related injuries. This type of insurance is essential because it guarantees that employees are not left without financial support during their recovery period after an injury sustained on the job. By covering medical expenses and providing income replacement, Workers Compensation promotes the well-being of employees and helps to ensure that they have access to appropriate care without the burden of high medical costs. The focus of Workers Compensation is on the health and financial stability of the workforce, making it an important safety net for injured workers. This system also functions as a no-fault insurance model, allowing employees to receive benefits without having to prove fault or negligence on the part of the employer. By providing these benefits, Workers Compensation encourages a safer workplace and supports employees in their recovery, while also helping to reduce the likelihood of lengthy and costly litigation related to work-related injuries. Each component of Workers Compensation addresses the critical need for immediate and ongoing support for injured employees, aligning with the overarching goal of maintaining a healthy and productive workforce.