For the Property & Casualty exam, workers' compensation is tested both as a policy product and as a state-mandated system. Virginia runs a competitive workers' comp market—there is no state-operated fund that monopolizes coverage—and claims are administered by the Virginia Workers' Compensation Commission. This guide reviews how the workers' comp policy is built and rated, then anchors everything in Virginia's specific rules.

The workers' compensation policy (national structure)

The standard workers' comp policy has two main coverage parts:

• Part One – Workers' Compensation. The insurer pays all benefits the state's comp law requires—medical, disability income, specific (scheduled) loss, and death benefits. There is no dollar limit, because benefits are set by statute.
• Part Two – Employers Liability. Covers the employer for work-related injury suits that fall outside the comp statute (for example, third-party-over actions). This part does carry dollar limits.

Other elements include Part Three – Other States Insurance (extends coverage to listed states) and the information page, which lists states, class codes, and estimated payrolls used to price the policy.

Rating and premium are driven by:

• Classification codes matched to the type of work.
• Payroll per $100 as the exposure base.
• The experience modification factor (mod), which raises or lowers premium based on loss history.
• A premium audit at the end of the term to reconcile estimated payroll with actual.

A competitive market (no monopoly state fund)

Virginia is a competitive state: employers buy workers' comp from private licensed insurers rather than a government monopoly. Rating data—loss costs, classifications, and experience-rating—comes through the National Council on Compensation Insurance (NCCI), which Virginia uses (unlike a few states that run their own bureau). Employers may also self-insure with state approval, individually or through approved group self-insurance associations.

Who administers claims: the Workers' Compensation Commission

Virginia claims and disputes are handled by the Virginia Workers' Compensation Commission (VWC)—a separate agency from the SCC's Bureau of Insurance, which regulates the insurers. The VWC adjudicates contested claims, approves settlements, and oversees the benefit system. Remembering that the VWC administers claims while the Bureau of Insurance regulates carriers is a classic state-specific distinction.

Mandatory coverage in Virginia

Coverage is mandatory for most employers; the common threshold cited is employers that regularly employ three or more workers (counting part-time and, in many cases, certain contractors). An employer meets the requirement by:

• Buying a policy from a private licensed insurer, or
• Self-insuring with Commission approval.

An employer that illegally goes uninsured loses the exclusive-remedy protection, can be sued directly, and faces civil penalties and possible personal liability.

Virginia benefits the policy pays

Part One funds the statutory benefits, conceptually the same categories tested nationally:

• Medical – reasonable and necessary treatment, typically with no deductible; the employee generally chooses from an employer-provided panel of physicians.
• Wage-loss (disability) – commonly about two-thirds (66 2/3%) of the average weekly wage (AWW), subject to a statewide maximum adjusted each year. Disability is classified as temporary/permanent and total/partial.
• Specific (scheduled) loss – set amounts for permanent loss or loss of use of listed body parts.
• Death benefits – wage-based payments to dependents plus a funeral/burial allowance.

A waiting period for wage-loss benefits applies (commonly cited as 7 days, paid retroactively if the disability lasts long enough); medical benefits generally have no waiting period. Treat the exact day counts as figures to verify.

Who may be exempt

Most employees are covered, but Virginia recognizes limited exceptions, which commonly include:

• Employers below the three-employee threshold (though they may elect coverage).
• Sole proprietors and partners (owners, not employees—may elect in).
• Certain executive officers/LLC members who qualify to be excluded.
• Casual workers, certain agricultural and domestic workers below thresholds.
• Federal employees, railroad workers (FELA), and maritime/longshore workers (covered by federal acts).

Key Virginia numbers to memorize

Common exam traps

• Assuming Virginia has a monopoly or competitive state fund. It does not—Virginia is a fully competitive private market.
• Confusing the regulators. The VWC administers claims; the Bureau of Insurance regulates insurers.
• Confusing Part One and Part Two. Part One pays statutory benefits with no limit; Part Two (employers liability) has dollar limits.
• Putting a waiting period on medical care. Only wage-loss benefits have the waiting period.
• Overstating exemptions. Owners may need to elect in, but most employees—including part-timers counted toward the threshold—are covered.
• Quoting a fixed maximum benefit. The statewide cap is adjusted annually.

Quick recap

The workers' compensation policy pairs Part One (unlimited statutory benefits) with Part Two (employers liability, with limits), priced on payroll per $100, class code, and experience mod, and reconciled by premium audit. Virginia runs a competitive market served by private insurers (rated through NCCI) plus approved self-insurance—there is no monopoly state fund. Claims are administered by the Virginia Workers' Compensation Commission, while the Bureau of Insurance regulates the carriers. Coverage is mandatory (commonly at three or more employees), and benefits include no-deductible medical, roughly 66 2/3% wage replacement capped at a yearly statewide maximum, plus specific-loss and death benefits. Remember the competitive market, the VWC, and the two policy parts, and the workers' comp questions become reliable points.