AIC AIC Workers Compensation & Liability Claims 3

Question 1

What is 'indemnification' in the context of a liability claim settlement?

Accepted Answer

The compensation paid to restore the injured party to their pre-loss financial position

Answer

The process of calculating punitive damages

Answer

The insurer's right to cancel a policy after a claim

Answer

The insured's obligation to report future claims

Question 2

What is a 'third-party administrator' (TPA) in workers' compensation?

Accepted Answer

An independent organization hired to manage and administer workers' compensation claims on behalf of self-insured employers or insurers

Answer

A state agency that oversees workers' compensation boards

Answer

The treating physician authorized to direct medical care

Answer

An independent claims adjuster assigned to catastrophic losses

Question 3

What is 'loss development' in workers' compensation reserve management?

Accepted Answer

The growth or change in the estimated ultimate cost of a claim over time as new information becomes available

Answer

The process of training new claims adjusters

Answer

The development of new loss prevention programs

Answer

The calculation of premium based on payroll

Question 4

What is an 'occupational disease' claim under workers' compensation?

Accepted Answer

A disease or illness caused by conditions or exposures particular to the worker's occupation over time

Answer

An injury caused by a single traumatic workplace event

Answer

Any illness requiring more than three days off work

Answer

A pre-existing condition aggravated by employment

Question 5

In liability claims, what is the purpose of a 'structured settlement'?

Accepted Answer

To pay a large claim as a series of periodic payments over time rather than a single lump sum

Answer

To resolve coverage disputes between insurers

Answer

To structure the insurer's legal defense team

Answer

To apportion liability among multiple defendants

Question 6

What is 'waiver of subrogation' and when is it commonly required?

Accepted Answer

An agreement by the insurer not to seek recovery from a specified third party after paying a claim

Answer

A policy condition requiring the insured to pursue third parties

Answer

A subrogation demand sent to the at-fault party

Answer

A policy exclusion eliminating coverage for intentional acts