A Virginia contractor has a workers' compensation policy with a $500,000 limit. An employee suffers a permanent disability requiring $750,000 in benefits. What is the contractor's financial exposure?
Correct Answer
A) $250,000 - the amount exceeding policy limits
The contractor is responsible for $250,000 ($750,000 - $500,000) beyond the policy limits. Virginia law requires adequate coverage, but contractors remain liable for amounts exceeding their policy limits.
Why This Is the Correct Answer
The contractor is responsible for $250,000 ($750,000 - $500,000) beyond the policy limits. Virginia law requires adequate coverage, but contractors remain liable for amounts exceeding their policy limits.
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