Oregon Construction Contractors (CCB) Practice Test

What is the purpose of workers' compensation insurance for contractors?

1. To cover lost income

2. To provide employee health benefits

3. To protect against liability claims

4. To cover medical expenses for work-related injuries

The correct answer is: To cover medical expenses for work-related injuries

Workers' compensation insurance for contractors primarily serves to cover medical expenses for work-related injuries. This type of insurance ensures that if an employee is injured while performing duties related to their job, the costs associated with medical treatment, rehabilitation, and sometimes a portion of lost wages are covered. This is crucial in a construction environment, where accidents can frequently occur due to the nature of the work, and it helps provide financial protection both for the workers and the contractors. Moreover, while other options may relate to aspects of employee welfare, they do not directly address the specific protections and benefits that workers' compensation provides. For instance, covering lost income might be a component of the benefits provided, but it’s secondary to the primary focus on medical expenses. Employee health benefits typically fall outside the scope of workers' compensation and are generally part of separate health insurance plans. Additionally, while workers' compensation can mitigate the risk of liability claims, its primary purpose is specifically about addressing injuries and providing medical care for affected employees.