An Oregon contractor's employee is injured on the job, resulting in $15,000 in medical costs and $8,000 in lost wages. If the contractor lacks required workers compensation coverage, what is their potential personal liability?
Correct Answer
D) $23,000 plus penalties and attorney fees
Without required workers compensation coverage, Oregon contractors face unlimited personal liability for medical costs, lost wages, plus penalties and attorney fees.
Why This Is the Correct Answer
Oregon law imposes severe penalties on contractors who operate without required workers compensation coverage. When an employee is injured and the contractor is uninsured, the contractor faces unlimited personal liability that includes all medical costs ($15,000) plus all lost wages ($8,000) — totaling $23,000 — plus additional civil penalties and attorney fees assessed by the state. The combined exposure exceeds the base injury costs.
Why the Other Options Are Wrong
Option A: $23,000 (medical costs plus lost wages)
$23,000 (medical costs plus lost wages) is the base injury amount but omits the mandatory penalties and attorney fees Oregon adds when a contractor operates without coverage. The state treats uninsured operation as a serious violation, so the answer understates actual liability.
Option B: $15,000 (medical costs only)
$15,000 for medical costs only ignores the lost wages component and the additional penalties. Oregon law does not cap liability at medical costs alone when a contractor is uninsured.
Option C: Limited to $10,000 maximum
There is no $10,000 maximum cap on contractor liability for workers compensation violations in Oregon. Capping liability at $10,000 would actually incentivize employers to skip insurance, so Oregon imposes unlimited liability instead.
Memory Technique
Think of uninsured liability as a snowball rolling downhill: it starts with medical costs + lost wages ($23,000) but picks up penalties and attorney fees as it rolls. The snowball is always bigger than its starting size.
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