Texas All Lines Adjuster Practice Test

Who purchases Workers Compensation insurance?

1. Employees

2. Insurance Agents

3. Employers

4. Government Agencies

The correct answer is: Employers

Workers' Compensation insurance is primarily purchased by employers to provide coverage for employees who may suffer work-related injuries or illnesses. This type of insurance is a legal requirement in most states, including Texas, as it helps protect both the workforce and the employer. An employer’s decision to obtain Workers' Compensation insurance covers various liability aspects, ensuring that workers receive necessary medical care and wage reimbursement for time away from work due to their injuries. Additionally, having this coverage helps employers manage the risks and costs associated with workplace injuries. While employees might benefit from this insurance, they do not purchase it directly. Insurance agents facilitate the procurement of such policies on behalf of employers, but they are not the purchasers themselves. Similarly, government agencies may regulate or oversee Workers' Compensation insurance, but they do not purchase it for business operations. Thus, the responsibility for obtaining this essential insurance falls squarely on employers.