Wisconsin · Personal Lines Sample Interactive Mind Map
The Workers' Compensation Policy — Parts One, Two & Three
A visual breakdown of The Workers' Compensation Policy — Parts One, Two & Three — one of the concepts you can count on seeing on the exam.
The TESTivity Interactive Mind Mapping Graphic we picked for the Wisconsin Personal Lines sample is The Workers' Compensation Policy — Parts One, Two & Three — and this is a concept you can count on seeing on your pre-licensing exam. Get the structure straight once and those questions turn into free points.
So explore it. Click through, see how the pieces relate, and let the layout do some of the remembering for you.
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The standard Workers' Compensation & Employers' Liability (WC&EL) policy is the form used for workers' comp in most states.
It is built from an Information Page plus six numbered Parts. Get the structure straight, then zero in on Part One — the core of the whole policy.
It is built from an Information Page plus six numbered Parts. Get the structure straight, then zero in on Part One — the core of the whole policy.
🗂️ How the WC&EL Policy Is Built
Information Page
Declarations: insured, period, states, business type, premium, endorsements
Declarations: insured, period, states, business type, premium, endorsements
General Section
Definitions used throughout
Definitions used throughout
Part One
Workers' Compensation Insurance
Workers' Compensation Insurance
Part Two
Employers' Liability Insurance
Employers' Liability Insurance
Part Three
Other States Insurance
Other States Insurance
Part Four
Your Duties if Injury Occurs
Your Duties if Injury Occurs
Part Five
Premium
Premium
Part Six
Conditions
Conditions
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Part One — Workers' Compensation Insurance
Pays the statutory benefits the law requires — with no dollar limit
What It Does
The insurer pays all compensation and benefits the insured employer owes under the workers' compensation law of any state shown in Item 3A of the Information Page. This is the employee's exclusive remedy — statutory benefits in place of suing the employer.
- No dollar limit: there is no stated limit — the insurer pays whatever the WC law requires. Unique among liability coverages.
- Statutory benefits: the policy incorporates the state's WC statute by reference. Benefits are set by law, not by the policy.
- State-specific: applies in the states listed in the Information Page (Item 3A).
- Defense included: the insurer has the right and duty to defend Part One claims.
How they test thisThe no-limit nature of Part One is the single most defining WC fact. When a stem asks 'what is the limit of Part One?', the answer is that there is no stated dollar limit — the insurer pays whatever the law requires. Every other liability coverage has a limit; Part One is the exception.
Part Two protects the employer against tort claims that fall OUTSIDE the workers' comp system — the ones the exclusive remedy doctrine doesn't bar.
Part One pays statutory benefits to the employee; Part Two answers lawsuits that escape that exclusive-remedy box. And unlike Part One, it has stated dollar limits.
Part One pays statutory benefits to the employee; Part Two answers lawsuits that escape that exclusive-remedy box. And unlike Part One, it has stated dollar limits.
⚖️ Claims That Fall Outside the Exclusive Remedy
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Third-Party-Over Actions
An employee hurt by a third party's negligence sues the third party, who then sues the employer for contributing to the accident.
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Loss of Consortium
The injured worker's spouse or family sues for loss of services or companionship — family members aren't employees and can sue.
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Occupational Disease Outside WC
Some diseases fall outside the state WC statute and allow a tort suit instead of statutory benefits.
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Intentional Torts (Some States)
Where the employer's conduct was deliberate enough to breach exclusive-remedy protection.
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Dual Capacity
Where the employer also acted in a non-employer role — such as the manufacturer of a product that injured its own employee.
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Standard Part Two Limits
100,000 / 500,000 / 100,000 — memorize the format
$100K
Bodily injury by accident
(each accident)
(each accident)
$500K
Bodily injury by disease
(policy limit / aggregate)
(policy limit / aggregate)
$100K
Bodily injury by disease
(each employee)
(each employee)
Higher Limits Are Common
Many employers buy $1,000,000 / $1,000,000 / $1,000,000, because the standard limits are often inadequate for a serious claim.
The trap they setThe 100,000 / 500,000 / 100,000 format is heavily tested. The order is: accident (each accident) / disease (policy limit) / disease (each employee). Don't transpose the middle and last numbers — the $500K is the disease aggregate, the $100K is per employee.
Part Three handles employees who work in or travel to states NOT listed in Item 3A — with a couple of limits the exam loves.
The insured lists additional states in Item 3C so coverage is available if operations expand or employees are assigned there.
The insured lists additional states in Item 3C so coverage is available if operations expand or employees are assigned there.
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Part Three — Other States Insurance
Coverage for states beyond those in Item 3A
How It Works
The insured lists states in Item 3C where it wants WC coverage available if operations expand or employees are assigned there — a safety net beyond the home states in Item 3A.
Important Limitations
- Does NOT cover monopolistic states — those require coverage through the state fund, not a private policy's Part Three.
- Coverage activates only if the insured promptly notifies the insurer when operations begin in a listed Part Three state.
- An injury in a state listed in neither Item 3A nor 3C can create a coverage gap.
Best Practice
Multi-state employers should list every state where employees work or travel in Item 3A or 3C, and review the list annually.
Look out for this on the examTwo reliable test points: Part Three does not reach monopolistic states (those go through the state fund), and coverage hinges on prompt notice. A stem will send an employee to an unlisted or monopolistic state and ask whether Part Three responds.
Rounding out the policy: the employer's duties after an injury, how the payroll-based premium works, and what the policy will not pay.
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Part Four — Duties After Injury
What the employer must do when a work injury occurs
- Provide immediate medical and first aid treatment
- Notify the insurer promptly (within the required timeframe)
- Keep records of all injuries, including first aid cases
- Cooperate with the insurer in investigation and defense
- Do not voluntarily make any payment or assume any obligation without the insurer's consent
- Report fatalities and catastrophic injuries to regulators as state law requires
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Part Five — Premium
Payroll-based, estimated up front, audited after
Premium Audit
Premium is estimated at the start, then audited against actual payroll after expiration. Higher payroll than estimated → additional premium owed; lower → return premium.
Classification & EMR
Each employee type gets a classification code with its own rate per $100 of payroll. The experience modification rate (EMR) adjusts the premium up or down based on loss history.
How they test thisRemember WC premium is based on payroll (per $100), estimated up front and trued-up by audit. A good loss record lowers the experience mod; a poor one raises it — the EMR rewards safer employers.
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Key Exclusions — What WC&EL Will NOT Pay
• Intentional acts by the insured (injuries the employer deliberately caused)
• Fines and penalties for violations of law (e.g., OSHA) or criminal acts
• Payments in excess of what the WC law requires
• Contractually assumed liability beyond what the law imposes
• Leased employees (from a staffing agency) — require a specific endorsement
• Fines and penalties for violations of law (e.g., OSHA) or criminal acts
• Payments in excess of what the WC law requires
• Contractually assumed liability beyond what the law imposes
• Leased employees (from a staffing agency) — require a specific endorsement
The people who write these questions love to……offer an OSHA fine or a deliberate act as a 'covered' loss — both are excluded. The policy pays what the law requires for genuine accidental work injuries, not penalties, not intentional harm, and not extra obligations the employer signed up for by contract.
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Top Exam Tips — The Workers' Comp Policy
1. Part One has NO dollar limit. The insurer pays whatever the state WC law requires — statutory benefits, the employee's exclusive remedy. This is the defining WC fact.
2. Part Two = Employers' Liability for tort claims outside the exclusive remedy: third-party-over, loss of consortium, occupational disease outside WC, some intentional torts, dual capacity.
3. Memorize the Part Two limits: 100,000 / 500,000 / 100,000 = accident (each accident) / disease (policy limit) / disease (each employee). Common upgrade: $1M / $1M / $1M.
4. Part Three = Other States. Lists states in Item 3C; does NOT cover monopolistic states (use the state fund); needs prompt notice; gaps occur in unlisted states.
5. Premium is payroll-based — estimated up front, audited after expiration, adjusted by classification rate and the experience mod (EMR).
6. Exclusions: intentional acts, fines/penalties (OSHA), payments above what the law requires, contractually assumed liability, and (without endorsement) leased employees.
7. Item 3A vs 3C: 3A lists the primary states (Part One applies); 3C lists the 'other states' for Part Three.
2. Part Two = Employers' Liability for tort claims outside the exclusive remedy: third-party-over, loss of consortium, occupational disease outside WC, some intentional torts, dual capacity.
3. Memorize the Part Two limits: 100,000 / 500,000 / 100,000 = accident (each accident) / disease (policy limit) / disease (each employee). Common upgrade: $1M / $1M / $1M.
4. Part Three = Other States. Lists states in Item 3C; does NOT cover monopolistic states (use the state fund); needs prompt notice; gaps occur in unlisted states.
5. Premium is payroll-based — estimated up front, audited after expiration, adjusted by classification rate and the experience mod (EMR).
6. Exclusions: intentional acts, fines/penalties (OSHA), payments above what the law requires, contractually assumed liability, and (without endorsement) leased employees.
7. Item 3A vs 3C: 3A lists the primary states (Part One applies); 3C lists the 'other states' for Part Three.
Exam vocabulary
Key Terms to Know
WC&EL Policy
The standard Workers' Compensation and Employers' Liability policy: an Information Page plus six Parts, used for WC in most states.
Information Page (Item 3A / 3C)
The declarations. Item 3A lists primary states (Part One); Item 3C lists 'other states' for Part Three.
Part One — Workers' Compensation
Pays statutory benefits the law requires, with no dollar limit. The core of the policy and the employee's exclusive remedy.
Statutory Benefits
Benefits set by the state WC law, incorporated into the policy by reference — determined by law, not by the policy.
Exclusive Remedy
The doctrine that workers' comp benefits are an employee's sole recourse against the employer for a work injury — in place of suing.
Part Two — Employers' Liability
Covers employer tort liability outside the exclusive remedy. Unlike Part One, it has stated dollar limits.
Third-Party-Over Action
A third party sued by an injured employee turns around and sues the employer for contributing to the injury — a Part Two claim.
Loss of Consortium
A family member's suit for loss of an injured worker's companionship or services — outside the exclusive remedy, covered by Part Two.
Part Three — Other States
Coverage for employees working in states listed in Item 3C. Excludes monopolistic states and requires prompt notice.
Monopolistic State
A state where WC must be bought from the state fund, not a private insurer — not covered under Part Three.
Premium Audit
The post-expiration review of actual payroll that trues up the estimated WC premium — additional or return premium results.
Experience Modification (EMR)
A factor that adjusts WC premium up or down based on the employer's loss history. Good records lower it; bad records raise it.
Like learning this way? There's a whole library of them.
If the old manual you inherited from the office breakroom isn't cutting it and this format fits how your brain actually works, you'll want the rest. There are 55 Interactive Mind Maps like this one in the TESTivity Platinum Personal Lines package — covering the full curriculum, right alongside the practice questions, exam simulators, and study guides.
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Studying for a different state?
This concept is the same wherever you sit for the exam — but your study guide and prep package should match your state. Find your state's L&H and P&C guides here →