Utah Contractor Practice Exam

What is the purpose of the workers' compensation insurance in the context of labor?

1. To cover lost wages only

2. To provide a legal defense in court

3. To ensure coverage of workplace injuries

4. To support retirement plans for workers

The correct answer is: To ensure coverage of workplace injuries

Workers' compensation insurance is specifically designed to provide coverage for employees who suffer injuries or illnesses as a result of their job. This type of insurance ensures that workers receive medical care for their injuries and can also compensate them for lost wages due to their inability to work while recovering. The primary purpose is to create a safety net for workers, guaranteeing that they are protected financially in the event of a workplace accident or occupational disease. This insurance serves several critical functions. It not only covers medical expenses related to the injury but also addresses rehabilitation costs and provides benefits for permanent disabilities if applicable. Additionally, the system aims to protect employers by limiting the liability they would otherwise face in personal injury lawsuits, as employees typically cannot sue their employers for job-related injuries if they are covered by workers' compensation. Other options like covering lost wages only, providing a legal defense in court, or supporting retirement plans do not encompass the comprehensive nature of what workers' compensation insurance is intended to achieve. Instead, the emphasis on coverage for workplace injuries reflects the core goal of ensuring that workers have the necessary support and resources in the event of work-related incidents.