Question 78

An employer who wishes to be self-insured for workers' compensation liability will have to post a surety bond to guarantee the employer's financial ability to pay workers' claims.

To be self-insured for workers' compensation liability, an employer must demonstrate financial capability to cover potential claims. Posting a surety bond serves as a guarantee to ensure that funds are available to settle workers' compensation claims.

A) obtain the agreement of all employees to such a plan

This option is incorrect because there is no requirement for employers to obtain employee consent to self-insure their workers' compensation liability. The decision to self-insure is typically a business decision made by the employer, not contingent upon employee agreement.

B) participate in the state's second injury fund

Participation in a state's second injury fund is not a requirement for employers wishing to self-insure their workers' compensation liability. This fund is generally designed to assist employers in covering costs associated with injuries that occur after a worker has a pre-existing condition, rather than a requirement for self-insurance.

C) post a surety bond to guarantee the employer's financial ability to pay workers' claims

This option is correct as it aligns with the regulatory requirements for self-insurance in many jurisdictions. Posting a surety bond provides financial assurance that the employer can meet its obligations for workers' compensation claims, thereby protecting employees' rights.

D) join with other self-insurers to create a large funding pool for the settlement of claims

While joining with other self-insurers may offer some benefits, it is not a requirement for an employer to self-insure for workers' compensation. Each employer can choose to self-insure independently, provided they meet the necessary financial criteria, including the posting of a surety bond.

Conclusion

The requirement for an employer to post a surety bond is a crucial aspect of being self-insured for workers' compensation liability, ensuring that claims can be paid. Other options, while they may have some relevance in different contexts, do not fulfill the essential condition for self-insurance. Therefore, option C is definitively correct, as it directly addresses the financial guarantee necessary for self-insurance.