ACSR 9 – Workers Compensation And Employers Liability Insurance Practice Test

What is the role of deductibles in WC/EL policies?

Deductibles are never used in WC policies Most WC policies do not have deductibles Deductibles apply to indemnity payments Deductibles apply only to defense costs

Correct Answer:

Most WC policies do not have deductibles

Explanation:

Deductibles in workers’ compensation and employers liability policies are not a common feature. The benefits and costs in WC/EL are largely set by statute and handled through the insurer’s claims process, so removing the deductible simplifies payment of mandatory benefits and speeds up claim handling. When a deductible is offered, it typically concerns indemnity benefits (the wage-replacement payments), while medical benefits and defense costs are still paid by the insurer after the deductible is satisfied. Because most policies do not include a deductible at all, the standard practice is that deductibles are not used in WC/EL, which is why the correct choice reflects that most WC policies do not have deductibles.

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