The WC&EL policy addresses two types of loss exposures. Part ____ covers the special circumstances under which an employee or a family member may sue the insurer in connection with a work-related injury or illness.

• A. Part One
• B. Part Two
• C. Part Three
• D. Part Six

Answer: (B)

In WC&EL policies there are two loss exposures: the workers’ compensation exposure (the no-fault benefits provided to injured employees) and the employer’s liability exposure (the legal liability of the employer to pay damages beyond those no-fault benefits). Part Two, the Employers Liability Insurance section, specifically addresses that liability exposure. It covers the kinds of claims employees or their family members might bring in connection with a work-related injury or illness and the insurer’s role in defending and paying those claims. This is the part that handles the scenarios where lawsuits against the employer (and potentially related claims involving the insurer) arise, beyond the standard workers’ compensation benefits. The other parts serve different purposes—Part One is about the statutory workers’ compensation benefits, Part Three covers other states, and Part Six involves endorsements—so Part Two is the one focused on those special liability circumstances.